Seattle Times: Sound Transit uses inflated value to collect higher car-tab fees

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Sound Transit has long used a simple but inflated formula that it inherited from the state Legislature to calculate how much a car is worth, and how much its owner should be taxed. That’s one reason why Sound Transit 3’s car-tab tax increase is leaving some folks with sticker shock, our online news partner The Seattle Times reports.

The higher car-tab tax included in Sound Transit 3 applies to tabs that expire after March 1. Over the first 10 years of a car’s life span, Sound Transit’s formula consistently overvalues a car’s worth compared with Kelley Blue Book values, resulting in higher car-tab fees for owners, The Times said. The newer the vehicle, generally, the more Sound Transit’s formula inflates the value.

Sound Transit 3’s car-tab fees, along with a property-tax and sales-tax hike, will fund transit projects that include 62 new miles of light rail by 2041 in King, Pierce and Snohomish counties.

You can read the complete Times story here.

 

18 COMMENTS

  1. Received the ugly property tax bill; not looking forward to the car registration taxes in a few months. When does the sales tax increase become effective (or has it already gone into effect)?

    • Jim,
      It goes into effect on April 1st
      Welcome to an Edmonds sales tax of 10.3%, the highest in the United Sates.

  2. The message for voters to learn from this ripoff is to never ever again vote for any tax that benefits the State or any State agency. I voted against ST3, and now that it has passed and is being implemented I’ve done additional study of its affects on taxpayers.

    When promoting ST3, Sound Transit said: “The estimated cost to a typical adult living in the Sound Transit District would be approximately $169 more annually, or about $14 more per month.” Well that certainly does not apply to Edmonds homeowners. The property tax component of ST3 amounts to $118 on an average home value of $474,800. Assume an average car value of $20,000 and the additional 0.8% of MVET (motor vehicle excise tax is already 0.3%) adds another $160 of taxes. So we’re already up to $278, and that does not include the increase of 0.5% added to our sales tax – bringing it to 10.3% on April 1st; a very fitting day!

    If all of that wasn’t bad enough, what really got to me is learning about the vehicle depreciation schedule being used by Sound Transit. The very same unrealistic schedule that was used to calculate the 2.2% annual license tab charge that was done in by I-695 in 1999. But we’re told not to fret about this, as the tax will be reduced….in 2028!

    Here’s the depreciation schedule being used by Sound Transit.

    Year of Service Percentage
    1 100%
    2 95%
    3 89%
    4 83%
    5 74%
    6 65%
    7 57%
    8 48%
    9 40%
    10 31%
    11 22%
    12 14%
    13 or older 10%
    For passenger vehicles, motorcycles, light-duty trucks, and small trailers: Take the vehicle’s MSRP, find the Year of Service (current calendar year – model year + 1 year = year of service) in this chart, and apply the corresponding percentage.

    • It will be “interesting” to see how all these extra taxes will trickle through the economy (I think economists call them negative externalities). Example: the sales and vehicle registration taxes will increase the cost of buying and operating a car. Those already living on the financial edge may have to forgo the car and use transit (maybe that’s what they intended? – brilliant). On the other hand, if fewer consumers buy a new (or used) car, the reduced sales will negatively impact dealers’ employment and sales tax revenue for the city of Edmonds and state. There are of course many more implications, but this is already too long.

        • Ron & Jim,
          Consumers will cut back on spending.
          This will have a very negative effect on business owners in downtown Edmonds. Maybe not the resturants, but when people can purchase “on-line” and pay no tax, guess who is going to get the business.
          Edmonds business owners in the downtown core, already are paying an outrageously expensive business improvement tax. The exact same rate as the University of Washington area BIA. Many business owners have been sent out for collections because Edmonds wants their money.
          Current council members need to be replaced with fiscal conservatives, not tax and spend fanatics.
          Citizens need to fight for their business owners and demand the closure of the Edmonds Alliance (Ed!). The organization was forced onto business owners thru lies and deception, and is illegal.
          City Hall’s attitude is “take us to court”, we have lots of money to waste on attorneys.

          Regarding tabs, I sold my VW back to VW because of the diesel engine scam pulled by VW. It was a 2013, not including the cash I received for the VW fraud, the car was valued at approximately 60% of sticker. So, when compared to the rates above, the State of Washington is taking people to the cleaners, once again.
          Remember the $ 35.00 tab fee the citizens passed? People will just go to counties to purchase new cars that do not have the higher tax rate, thus avoiding the tax.
          This will kill spending in King and Snohomish counties.

  3. Thank you Mr. Wambolt for the accurate but distressing facts. I too voted against ST3 based on the facts portrayed and disadvantage to Edmonds taxpayers. The car tab portion is simply a legalized crime formula that even the state legislature has dropped. This plan is the trifecta of rip offs for taxpayers. The lesson may be to study before voting yes carte blanche for every program with a tax increase. We are told not to worry because there is a silver lining and relief in 2028? That is simply a ridiculous statement.

    • Mike, thank you for mentioning that the legislature dropped the bogus depreciation formula being used by Sound Transit. I neglected to reference that happening 11 years ago.

  4. Sadly, I believe ST3 won in Edmonds…and there was lots of publicity about its bloated taxation claims, but no one was paying attention I guess, sigh!

    And per Ron Wambolt’s comments and analysis: Excellent…thank you!

  5. Thanks Ron for the Math 101 lesson. Obviously it is needed since this crime occurred here in Snohomish county. Seems that the New Math is really smoke and mirrors.
    Let’s look at their promises: project to be completed by 2041 for $54 BILLION. So mark your calendar for 1-1-2041 to see if ST3 kept their promises.
    Hint: the Univ of WA station was 10 years past their original promise and over budget so they spent almost $1 million on an opening Party!
    I predict that a lot of Edmonds cars will be getting registered out of ST3 taxing area in the next year, just saying…..

    • That will not work either because you have to show a drivers licence with an address where you are registering your vehicle and they have to match. Also if you are going to sell a vehicle and the tabs are going to expire or have already expired do not renew them. The person buying the car will have to pay it again when they transfer the title and nobody gets a credit or refund even if you bought them the day before.

      • Washington Department of Revenue refused to give a refund on the sales taxes I paid when I purchased my Federally illegal VW diesel car.
        Figure this logic, I was defrauded at the point of sale, and the State’s reply was that a refund of sales tax was not warranted.

        • What a good deal for the state! At least you won’t have to amend your Federal income taxes if you itemized and took the sales tax deduction in 2013 – I bet you feel a lot better now.

  6. Governing should include being honest with the people so we can make informed decisions. Surely many people knew that the car value table was the one that was rejected in the past and a more accurate table was available. All that would have had to be done is use the more accurate table and a different tax rate. An inflated value of 10,000 at 8% produces 800 and a correct value of 8,000 at 10% would also produce 800. But then one would have to say 10% vs 8%.

    I cannot believe members of the advisory committee or boards or someone did not know but were just unwilling to discuss it. Now we have all this flap and on more example of deceptive government.

    Does anyone know how to find out who new the details and when did they know it?

    • Certainly the group who wrote the Proposition had to know to accurately estimate how much the excise tax would have to be in order to collect the expected revenue. My voter pamphlet indicates that would have been the Board of the Central Puget Sound Regional Transit Authority which was signed by Dow Constantine (Board Chair) and attested by Kathryn Flores (Board Administrator)

      Maybe also those writing the “For” argument in my pamphlet (the Pro committee of Jennifer Gregerson, Ray Stephanson and Rick Steves) knew, but probably not. They did write, “Fact: The average cost per adult is just $14/month… We can’t afford to wait. Vote Yes!,” but they may not have actually looked at the details as to how those “costs” to the taxpayer were calculated.

  7. I paid for my car tabs. I live in Lakewood and last year for my 2010 Outback I paid 48.75. For 2017 I had to pay 234.75. I didn’t vote for ST3. I’ll never see it so why vote for it. I’m outraged by this. WA State is robbing us!!!

  8. In 2016 the MVET was 0.3%; in 2017 it became 1.1%, or 3.67 as much. If we assume Renae’s car value didn’t drop, which of course it did, in 2017 she would have paid 3.67 x $48.75 (the 2016 tax) = $178.91; that’s $55.84 less than she’s actually paying. That’s a result of the screwy vehicle depreciation schedule being used by the Sound Shysters.

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