Auto dealers file lawsuit against state over vehicle tax

OKLAHOMA - In just a few short days, Oklahomans will have to start paying sales tax when purchasing vehicles.

"There's a bump in sales right now but, after the first of July, it will slow down," said Lynna Bryan with the Oklahoma Independent Automobile Dealers Association.

The new law is set to go into effect July 1.

It's long been a tax exemption in Oklahoma.

We've always paid a 3.25 percent excise tax.

Now a 1.25 percent sales tax will be tacked on, raising the total taxes on a $20,000 vehicle from $650 to $900.

"For some people, that's a car payment. That's another month's car payment. And, it's not just that it's $250, but it makes a total of almost a thousand dollars just for the tax on the vehicle," Bryan said.

"We just think that the consumers ought not have to pay an additional sales tax when they buy a new vehicle or a used vehicle," said Larry Battison, owner of Battison Honda.

Battison Honda is a plaintiff in a lawsuit against the state challenging the constitutionality of the vehicle tax.

The other plaintiffs are the Oklahoma Auto Dealers Association and a young Ponca City woman thinking about buying a car this summer.

Battison said the tax could end up hurting our state if it slows down the economy by causing less cars to be sold.

"A big concern for the majority of people that buy a new or used vehicle is the up front money that they have to pay, in other words, the out of pocket money," Battison said.

At issue in the lawsuit: whether it was against the constitution to pass the law in the final days of session.

Revenue raising measures have to be passed before the last five days of session.

Some lawmakers said, if this tax ends up being struck down by the Oklahoma Supreme Court, it could be devastating for state agencies.

"Unless we call a special session, if this is struck down, a lot of state agencies are going to hurt as a result of this lawsuit and others," said Rep. Forrest Bennett (D) District 92.

This has been a political issue.

Many democrats said they warned republicans this law would be challenged.

Republicans in favor of the measure argue it is not a revenue raising measure, simply a repeal of a tax exemption.

The Oklahoma Supreme Court will now look at the issue.