What's New
Luxury
Car Levy too Taxing for State
The Boston Herald
By, Jerry Kronenberg - July 10, 2008
The
Registry of Motor Vehicles is giving up on collecting millions of dollars
in excise taxes that it never billed people who own Lamborghinis,
Maseratis and other ultra-luxury cars.
RMV
officials told state auditors that going after the money would take a
“tremendous and laborious effort” - and probably violates
Massachusetts law, according to an audit released yesterday.
As
the Herald first reported last year, the Registry failed to assess some
131,000 super-costly vehicles properly from perhaps the late 1990s until
2007.
During
that period, the RMV used National Auto Dealers Association car values to
calculate tax bills on vehicles registered in Massachusetts.
However,
NADA’s database excludes high-end cars, big trucks and other unusual
vehicles, including some Massachusetts-registered models that auditors
found were worth $1.5 million.
A
special RMV unit once calculated such vehicles’ values by hand, but
gradually stopped doing so as staffing levels dropped.
Instead,
Registry workers either left cars’ valuations blank - meaning owners
never got tax bills - or wrote in “$17,000” regardless of vehicles’
actual values.
The
result: Someone who owned a $325,000 Maserati would have to pay $383 a
year in local auto-excise taxes at most, instead of the correct $7,313.
“It’s
crazy,” State Auditor Joseph DeNucci told the Herald. “Owners of these
types of vehicles have not been paying close to their fair share of the
auto-excise tax.”
Auditors
estimate the glitch cost Massachusetts cities and towns, which actually
receive car taxes, as much as $32 million a year.
“It’s
absolutely had an impact,” said Donna VanderClock, town manager of toney
Weston. “A $17,000 valuation seems pretty low for the kind of cars we
often see driving around Metrowest areas.”
The
Registry has assessed back taxes on some car owners who never got excise
bills, but thousands of luxury car owners have gotten off scot free.
The
RMV has no way to collect on vehicles no longer registered in-state.
Additionally, the agency believes it can’t legally demand extra taxes on
cars incorrectly valued at $17,000.
RMV
chief Rachel Kaprielian, who just recently took over the Registry’s
helm, admits her agency hasn’t fired or disciplined anyone over the
foul-up.
“The
reasons for what happened aren’t important,” Kaprielian said.
“What’s important is that ... people who are driving these luxury cars
are paying a pretty penny (in taxes) now.”