Vehicle tax vote carries hidden costs 

Vehicle tax vote carries hidden costs

Montana Indian leaders are mulling over their options in the wake an approved ballot issue that will increase vehicle registration costs for many reservation residents.

Legislative Referendum 115 was approved by the 1999 Legislature and was forwarded to the state’s voters in the Nov. 7 election. Montanans approved the measure, which lowers licensing costs for light vehicles and eliminates a sales tax on new cars, by a 58-42 percent margin.

But lawmakers say an unintended consequence of LR-115 is that tribal members living on their own reservations will now pay more for registering their vehicles, because the state assessment will be considered a “fee,” and not a “tax.” Before passage of LR-115, reservation tribal members were not required to pay state taxes on vehicle registration, only additional county-based fees.

According to the Montana-Wyoming Tribal Leaders Council, a reservation Indian who owns a 1998 Chevrolet paid only about $25 in fees for registering the car before the ballot measure passed. Now, the group says, the same owner would pay $195 for state registration, plus other county assessments. Indian leaders contend the change is illegal, but it is yet unknown where a challenge will surface.

“Right now, we’re still in the strategy mode,” says Jonathan Windy Boy, chairman of the leaders council and a member of the Chippewa-Cree Business Committee on the Rocky Boy’s Reservation. “We do plan on moving forward.”

The ballot issue’s impacts on Indians were not fully realized until just before the election. In fact, Rep. Carol Juneau (D-Browning), says she voted for the hastily constructed measure when it was raised in the House without knowing it would be detrimental. The result, she says, is that a reviewing mechanism must be created in the Legislature so Indians don’t get the shaft again in future bills.

State budget specialists say up to $1.1 million more will now be collected each year from tribal members who were previously exempted from the state tax. Officials say about 20,000 Indians currently live on the state’s seven reservations. Before LR-115, car and truck registration costs were based on the vehicle’s value. Now the system is broken into three categories, and make and model no longer matter. Flat assessments of $195 for vehicles up to four years old, $65 for cars five to 10 years old, and $6 for cars 11 years or older are now the standard. Luxury car owners and drivers of other expensive rigs get the biggest break in the deal. Buyers of cheaper, late-model vehicles will pay more than they did under the old system, even if they live outside reservations.

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