OKLAHOMA CITY – Rep. Jim Grego, R-Wilburton, this week led an interim study examining criteria used by the state of Oklahoma to determine the retail value of vehicles for tax purposes.

The study took place Oct. 23 before the House Appropriations & Budget Subcommittee on General Government at the State Capitol.

"This issue was brought to my attention by one of my constituents and a neighbor of mine," Grego said. "He bought a truck, and there was fluctuation between what he paid and what the value of the vehicle was determined to be. So, my goal is to look at this issue and see if we can make some changes in the system to make this more fair for consumers who purchase vehicles."

Grego invited Joe Mack McAlester of Wilburton to explain his experience.

McAlester said he bought a used truck at an auction for a price that was well under the listed Blue Book value. He planned to use the vehicle on his farm, so he wasn't concerned that it wasn't in perfect condition. When he went to get his tag and title, however, he said was charged excise tax based on the full book value of the vehicle without consideration for the vehicle's condition. His argument was he should only have been charged based on what he paid, the same as how sales tax is calculated on other purchases, instead of the higher value. The difference in price would have saved him several hundred dollars.

McAlester said he's talked to other neighbors who've had similar experiences.

"I was very grateful for Joe's input on this topic as I know it's one that affects a lot of people in our state, particularly farmers and ranchers who tend to buy older vehicles to use for their work," Grego said.

Representatives from Service Oklahoma and Tinker Federal Credit Union also presented during the study, sharing their methodology for determining a vehicle's value and how the state assesses taxes. Tinker is the largest indirect dealer financing partner in the state. 

Grego said the methodology used to calculate excise tax was largely inherited from the Oklahoma Tax Commission. But the lenders explained that loan risk factors based on credit history, collateral values and other things all play a role in determining a vehicle's value. They also rely on industry standards such as those set by the National Automobile Dealers Association.

Rep. Mike Dobrinski, R-Okeene, also participated in the study, giving insight as a former automobile dealership owner. He said he's willing to help Rep. Grego draft legislation that might help Oklahoma vehicle buyers pay less tax.