Oklahoma’s motor vehicle taxes are a combination of an excise (sales) tax on the purchase of a vehicle and an annual registration fee in lieu of ad valorem (property) taxes. Until 2017, motor vehicles were fully exempt from the sales tax, but under HB 2433, the exemption was partially lifted and motor vehicles became subject to a 1.25 percent sales tax.
The excise tax is 3 ¼ percent of the value of a new vehicle. For a used vehicle, the excise tax is $20 on the first $1,500 and 3 ¼ percent thereafter. The value of a vehicle is its actual sales price. The annual registration fee for non-commercial vehicles ranges from $15 to $85 depending on the age of the vehicle. Registration fees are higher for commercial vehicles (from $95 to $1,078) and less for farm vehicles ($30). Taxes generally are paid to tag agents, who are contracted by the Tax Commission as collection agents.
The state’s current motor vehicle taxes are based on State Question 691, approved in 2000 by an 80 percent vote. Only the state collects motor vehicle taxes, which are split between the state General Revenue fund, schools, local governments, and several other small uses.
Motor vehicles taxes, also categorized as tag agent remittances, generated $782.9 million in FY 2019, 7.1 percent of total tax revenues; that year, they were the 4th largest tax after the personal income, sales tax and gross production taxes.