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SD vehicle fees incresed


JRP

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If SD is your current or future domicile state, be aware they just approved some increases in vehicle fees to fund road & bridge repairs. as I understand it, these go into effect immediately, April 1, 2015

 

The state tax on new or transferred vehicles is going from 3% to 4%, and the annual registration fee is going up an avg of 20% (varies by category)

 

The state fuel tax is also going up but that mostly impacts the folks living there.

 

http://news.sd.gov/newsitem.aspx?id=17375

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Well that sucks. It looks like I'm going to be a future Texan after all. I'll save money on my resident fishing license too, as I don't plan on doing any fishing in SD, but do in TX. I just hate the hassle of getting my vehicle and trailer inspected. They do this in Louisiana where I live and the unwritten rule is to "tip" the "inspector" so he will just write the inspection sticker. If you don't do this they will find every little thing to deny you the inspection like a rock chip or small crack in the windshield (so he can sell you a new windshield), headlights out of alignment (to sell headlight alignments), unevenly worn tires (to sell front end alignments), worn windshield wiper blades (regardless their condition), etc. It's cheaper to just tip the guy $20 bucks up front. I hate graft and corruption, but what can you do?

 

It's funny that these politicians don't realize that people will move to a lower tax/fee state if they have the option, rather that pay the increased tax rate. Now SD won't get any tax revenue from me, and TX will. It's like the Laffer curve. Keep raising taxes and at some point revenue drops as free people just go elsewhere (there's less folk to tax) or they make decisions to legally avoid or reduce taxes/fees, such as buy lighter, older vehicles, trailers, etc. It's like raising the sales tax rate which just incentivizes shopping online, or with neighboring communities; or raising local alcohol and tobacco "sin" taxes, which just stimulates the gray market for these products and encourages people to cross county/state lines to do their shopping. Incidentally, that's what led to Eric Garner being choked to death by NYC police - for selling gray market cigarettes to avoid the oppressive NYC cigarette tax. If NYC didn't charge a punitive $5.85 tax per pack of cigarettes that man would still be alive today. The state where I live allows local municipalities to increase sales taxes at certain shopping centers and businesses. So why shop there? Certain shopping centers here have a 9.75% sales tax rate, while a block away the rate is 8.75%. And in the parish right next door it is only 7%. Guess where I shop? It would seem that local governments would lower their tax rate to compete with their neighbors, encouraging people to do business there. I can't deposit a percentage, can you? Neither can they, and after this ruling SD will not deposit any of my money. I'm not upset; it's just a business decision.

 

Chip

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I'm not sure what all the fuss is about. SD still has no income tax and no inspection requirements. If it costs an extra ~$15 for the tags for my toad, it's not the worst thing in the world. States do need income to perform required tasks such as road repair; increased vehicle fuel economy and reduced per capita driving have substantially reduced both federal and state fuel tax revenues.

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Yes, perhaps I should have added that even with these recent increases, SD is still lower overall than most states. Their 4% on vehicles is still well under the 6% or higher tax charged in most other states.

 

I'm not sure what all the fuss is about.

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I just hate the hassle of getting my vehicle and trailer inspected. They do this in Louisiana where I live and the unwritten rule is to "tip" the "inspector" so he will just write the inspection sticker. If you don't do this they will find every little thing to deny you the inspection like a rock chip or small crack in the windshield (so he can sell you a new windshield), headlights out of alignment (to sell headlight alignments), unevenly worn tires (to sell front end alignments), worn windshield wiper blades (regardless their condition), etc. It's cheaper to just tip the guy $20 bucks up front. I hate graft and corruption, but what can you do?

 

 

I've been a Texas resident since 1968 and have been getting vehicles inspected since 1976. I have never once had to "tip" an inspector for a vehicle inspection, and I've never been nitpicked. If they found something like a tail-light bulb out, I was given the choice of either taking it home to get it fixed and then bringing it back for a free "follow-up", or having it fixed there at the garage, generally for a reasonable fee like $10. Now I have seen them turn down some junk vehicles that had no business being on the road, and I hope that the new inspection enforcement continues this trend.

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SD Bases RV tag cost on weight of our rigs. Here is the actual increases for our rigs.

 

Section 14 – Section 14 increases the license fee for noncommercial motor homes (§ 32-5-6.1). Here are the fee increases:

  • Motor homes 6,000 lbs or less goes from a $90 fee to a $108 fee.
  • Motor homes 6,001 lbs to 8,000 lbs goes from a $120 fee to a $144 fee.
  • Motor homes from 8,001 to 10,000 lbs goes from a $150 fee to a $188 fee.
  • Motor homes over 10,000 lbs are have a fee of $30 for every 2,000 lbs over 10,000 lbs. That fee is raised to $36.

Section 15 – Section 15 increases the fees for recreational vehicles and noncommercial trailers and semitrailers (§ 32-5-8). Here are the increases:

  • 1,000 lbs or less goes from a fee of $15 to a fee of $18.
  • 1,001 lbs to 2,000 lbs goes from a fee $30 to a fee of $36
  • 2,001 lbs to 3,000 lbs goes from a fee of $45 to a fee of $54
  • 3,001 lbs to 4,000 lbs goes from a fee of $60 to a fee of $72
  • 4,001 lbs to 5,000 lbs goes from a fee of $75 to a fee of $90
  • 5,001 lbs to 6,000 lbs goes from a fee of $90 to a fee of $108
  • 6,001 lbs to 7,000 lbs goes from a fee of $105 to a fee of $126
  • 7,001 lbs to 8,000 lbs goes from a fee of $120 to a fee of $144
  • 8,001 lbs to 9,000 lbs goes from a fee of $135 to a fee of $162
  • 9,001 lbs to 10,000 lbs goes from a fee of $150 to a fee of $180
  • Each 1,000 lbs over 10,000 lbs current gets of a fee of $15 per 1,000 lbs. That fee is increased to $18 per 1,000 lbs.

 

Section 26 – Section 26 revises the maximum speed limit on the Interstate (§ 32-25-4) from 75 mph to 80 mph.

 

SD will remain our base for now. Looks like the fee increases will not tip the scales.

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The trend to ever higher speed limits is almost as troublesome as higher registration fees. With rv'rs in particular trying to stay in the 55-65 mph range it is even more hazardous. You know if the speed limit is 80 a good number are going 85-90.

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Everyone's situation is different, but this is how the numbers work out for me. Initially SD is about $350 less to get all my truck, trailer and 2 motorbikes registered. The recurring vehicle registration fees were about $50/yr lower in SD. Their increase in registration fees of $52.75 in my case makes SD a wash. Texas also has a $30/yr (for 4 units) vehicle inspection fee. Also vehicle insurance rates are lower in SD, saving me roughly another $350/yr.

 

On the other side of the balance sheet, I must travel to SD initially, at a one way cost of around $600 ('ll make a vacation out of it so won't be considering both ways to be fair) and every 5 years to renew our DLs. Since I don't know exactly how far I will be away this cost will be variable, however for comparison purposes I've decided to arbitrarily estimate an average yearly amortized cost of $150/yr. The difference between a resident and non resident TX fishing license will cost me $28/yr. Mail service is also about $35/yr cheaper in TX. The biggest tipping point is availability of health insurance in SD, which is difficult to quantify, as if choose SD I'll be forced to get a health plan that I cannot use out of state except for emergencies (for the 3 year gap period from age 62-65). At my projected future income level neither state will cost me anything with the current ACA subsidy. If this changes, which I expect it will, the cost should be similar in each state. Anyway, who can predict the future?

 

Bottom Line:

So a final initial cost difference puts SD initially about $67 cheaper, and about $170/yr cheaper than TX on an annual basis even after the tax/fee increases. The biggest drawback to SD is the health insurance issue which though difficult to quantify, could end up costing me much more than the $170/yr savings if one of us gets sick during the 3 gap years and must go to a doctor for a non-emergency medical need. However, we are both pretty healthy (though a little overweight). My DW goes to a dermatologist for checkups about twice a year (skin cancer runs in the family, but she's been clear so far), but other than that, neither of us has been to the doctor for several years and we take no prescription meds.

 

Maybe I over reacted a tad, but maybe not, as I was on the fence as to which state to choose before the increases. If we live 20 years after retirement that $170/yr would add up to $3,400 in savings. I can't see 3 yrs worth of non-emergency doctor visits costing anywhere near that, especially if my DW decides to go to Mexico and pay cash for her semi-annual dermatology visits (since we'll often be near Mexico and could integrate it into our dental visits). Maybe she could even back off to annual doctor visits for those 3 years since she's been healthy thus far. What would you guys do given my situation, strictly from an economic standpoint?

 

Chip

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I am told by my SD mail forwarding service that I may renew my tags for 2015 early before 4/1/15 and save the approximate 20% increase for one year. I plan on doing that inline at the SD DMV site in the next few days as mine expire in May.

 

Ted

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