State Politics

Mississippi has one of the priciest car tags in the nation. Here’s where the money goes.

Ken Berry writes a check for his car tag as deputy clerk Sherry Hill processes it at the Harrison County Tax Collector's office at the county courthouse in Gulfport on Tuesday, Feb. 27, 2018.
Ken Berry writes a check for his car tag as deputy clerk Sherry Hill processes it at the Harrison County Tax Collector's office at the county courthouse in Gulfport on Tuesday, Feb. 27, 2018.

It’s often easy to spot someone new to the Coast.

Take the line at the Tax Collector’s Office, for example. The newbie will be the person acting like they’re having a heart attack when they hear the price of the tag for their new vehicle.

Sue Ann London is no newbie, she lived on the Coast for years and now is in Petal, but she remembers buying a tag for an RV.

“The lady asked me if I was sitting down before she gave me the amount,” she said.

Tags are, to put it politely, high.

Wallet Hub figures Mississippians pay the third-highest vehicle registration prices in the United States. It says, on average, the price of a tag on a $24,000 car is $813. Virginia, at $971, and Rhode Island at $1,144, or the only states whose drivers pay more for tags on cars worth $24,000.

And if you come to Mississippi from Illinois, Hawaii, Tennessee, Florida or any of the other 20 states that charge no taxes on car tags, that can be quite a shock.

Where the money goes

Yes, taxes are the reason the price of a car tag is higher here. And taxes are the reason that price can vary from city to city and county to county. Those taxes are based on millage rates set by cities, school districts and counties and the assessed value of the vehicle.

So, why do some states tax car tags?

“Anywhere you go, there is going to be some type of revenue collected,” said Denise Gill, assistant tax collector in Harrison County. And taxing motor vehicles is a way that it is not all put off on the property owners. It’s distributed more evenly amongst the users.”

Tag purchasers are actually paying into the road and bridge fund and paying for city government, county government and schools, many of the same things funded by property taxes.

Longtime residents are used to paying hundreds of dollars for a car tag. And, they know that price used to be higher. In 1994, the Legislature passed a tax break of 5 percent of the vehicle’s assessed value to reduce the cost of tags.

For instance, the owner of a 2011 Chevrolet Cruz in Gulfport last year paid $15 for the privilege tax that funds the road and bridge fund, $21.74 for the county, $20.37 to the city and $31.62 to the school district. The total bill, $101.48, included a $12.75 registration fee.

Here’s where the Department of Revenue says that fee goes:

▪ $5 for a tag and decals, or $3.75 for decal only.

▪  $4 for the benefit of the MS Trauma Care Systems Fund.

▪ $5 for the benefit of the Four-Lane Highway Program.

Oh, and that 1996 tax break? It saved the vehicle owner almost $74.

Better with age

That tag is fairly cheap, but the vehicle is more than seven years old. Every year, a vehicle is worth a little less, which means the tag is less expensive. That’s one reason there are lot of older vehicles on the road.

Gill said the county got something of a car tag windfall in the years right after Hurricane Katrina, which wiped out vehicles both new and old. The older vehicles were replaced with newer ones worth much more and that caused a temporary boost in revenue.

The trade off to high tags?

“We have very low property taxes,” Gill said.

Wallet Hub figures a homeowner pays lower property taxes lower than 32 other states. It figures the owner of a $105,700 home, the media value in the state, would pay $841 in property taxes. Remember Illinois, the state with no taxes on its tags? The owner of a median value home there would pay $4,058, the second highest rate in the country.

Of course, tag taxes and property taxes aren’t the only ways the state raises money. Shoppers pay sales taxes, drivers pay fuel taxes and then there is the income tax.

Paul Hampton: 228-284-7296, @JPaulHampton