The car tax: High number of scofflaws indicates a problem

The state's vehicle registration tax brings out the worst in many people for a very good reason: It's one of the worst taxes in the state.

Beyond the brutal fees and long lines endured for the privilege of keeping a license plate in this state, nothing makes Nevada drivers hotter than seeing an out-of-state plate on a vehicle that clearly doesn't belong to a tourist. Nearly everyone has a story about a neighbor or co-worker who managed to avoid registering his car for many months or a few years.

So last week's story about a Nevada Highway Patrol initiative to ticket registration scofflaws -- residents who don't change their out-of-state plates within 30 days of moving here -- was greeted by some Las Vegans with enthusiasm. Not only are many residents excited about the prospect of these drivers being hit with a maximum fine of $1,000, they want to squeal on their neighbors and associates.

"You write a $500 or $600 check at the DMV, and then you drive down the street and see these companies working on our streets with Utah plates," Las Vegas resident Jim Jackson complained to the Review-Journal.

"These people are not snowbirds, they are tax cheats and scumbags," Southern Nevadan Jane Kentz said.

The Highway Patrol, however, has no interest in responding to residents seeking registration retribution. They will ticket drivers for license plate violations only during stops for moving violations. Troopers' foremost responsibility is protecting public safety, not settling tax grudges.

But the whole dispute highlights an unfortunate reality: Nevadans wouldn't despise their registration taxes in the first place if they weren't so unfair.

For starters, the taxes are based on a vehicle's MSRP -- manufacturer's suggested retail price -- not on the actual sales price. The DMV values a car at 35 percent MSRP, taxes it at 4 percent of that value, then depreciates it each year.

The DMV's depreciation table was borderline delusional before state lawmakers made it worse in 2009 as part of a tax-hike package. A typical car loses 15 to 25 percent of its value the moment its new owner drives it off the dealership lot. From the DMV's perspective, however, vehicles depreciate only 5 percent in the first year, 25 percent after three years and 55 percent after six years, keeping levies artificially high and in no way tied to the market value of a car.

It is, pure and simple, a money grab to fund just about every government service imaginable. Nevada's vehicle taxes are among the highest in the nation and create a disincentive to replace an aging vehicle with a newer model. They are such a punch in the gut, they encourage everyone to avoid paying them for as long as possible.

It would be far better to impose a much lower, flat fee for registration renewals and get away from arbitrary valuation as a basis for the tax, as many states have, and to stop requiring drivers to register every year. Oregon, for example, requires registration renewals every two years.

When you have a poorly conceived and unpopular levy, the righteous course is reforming the tax to ground it in reality.