Does Utah law penalize motorhome owners? Is your state next? –

Utah penalize some motorhome owners
Motorhome images:

By Russ and Tiña De Maris
Some Utah motorhome owners have been priced off the road. How? A law that came into effect last year has changed how Utah motorhome owners are billed for their motorhome registration. Does Utah penalize motorhome owners? Some feel they are being penalized. And while it may seem a “local issue,” what happens if your state takes the same approach?

Smelling a rat

In the past, Utahans saw their registration fees based on the value of the motorhome. But a wide-eyed Utah senator, Curt Bramble, penned and got passed Senate Bill 169. Bramble’s brainchild, by its description, enacted “an age-based uniform statewide fee for motorhomes.” Sounds pretty innocuous on the surface. After all, if it’s uniform, it must be easier to understand and deal with, right? Bramble says he consulted with the Utah RV Dealers Association. He says the association did all his research used in preparing the bill.

Right there, some might begin to smell a rat. Just whose interests does an RV dealers’ association serve? Just how the bill plays out may give a clue. Enter Lynne O’Donnell, a motorhome owner in Murray, Utah. O’Donnell told Utah TV station KSL that she figured it out when she got her renewal notice from the Utah DMV. In 2018, she paid $142.75 to renew her tabs. In 2019 the price skyrocketed more than 300% to $488.25. What happened?

“Age-based uniform standard”

Senate Bill 169 kicked in, that’s what happened. That so-called “age-based uniform standard” meant that it didn’t matter how much her motorhome’s market value was. What owners pay is now based on how old the rig is. Let’s put it another way: A motorhome worth $750,000 that’s between six years old and eight years old would be assessed a renewal fee of $425. A motorhome of the same age but valued at, say, $75,000 would pay the same $425 fee. Under the schedule, a brand-new motorhome, fresh off the lot, pays a maximum of $690, regardless of price.

For motorhome dealers, this has got to be a dream come true. Someone comes onto the lot, concerned about how much money they’ll have to pay in registration fees. The salesman simply assures them that the worst they’ll pay is $690 a year for the first three years. He then gently steers them to that area of the lot where the big-ticket motorhomes are. But like the man says, “I pity the poor immigrant.” To make this a sweet deal for folks who can afford the big-ticket rigs, the balance has to come in somewhere. That’s because the law was written so that the state would not be “out” of any revenue in the deal.

In fact, the bill’s fiscal notes make this statement: “Enactment of this bill may increase the overall tax burden for owners of motor homes by $119,000 in [Fiscal Year] 2020.” That little bit of cream off the top goes to local governments. But who pays for the big boy toys to get a big break on their registration fees? The fine print in the fiscal note adds: “Within the overall impact, some motor home owners may see a decrease in their tax burden of up to $5,955, while other owners may see an increase in their tax burden of up to $690.” A $6,000 break for some motorhome owners is a pretty sweet deal – unless, of course, you happen to be the poor schlep who suddenly sees their registration jump nearly $700.

Freedom of the open road?

For Lynne O’Donnell, one of the “some” who would see an increase, that 300% jump meant her motorhome isn’t the “freedom of the open road,” so ballyhooed by the RV manufacturers. Instead, her dream is now stuck in the driveway. She can’t afford the increase in registration fees.

Ostensibly, Curt Bramble’s bill was written as a response to how much money the state was losing. How’s that? Bramble pointed to states like Montana, where out-of-state motorhome owners can form a limited liability corporation. They then register their rig in Montana where lower registration fees are charged. But with the “assistance” of Utah’s RV Dealers Association, some think something smells suspicious about the Utah law.

Does Utah penalize motorhome owners? Should it matter to you? Many states are bellyaching about the “Limited Liability Corporation” arrangements that they say are cutting into their revenue. Some have reacted by passing laws that make such transactions illegal, and have successfully gone after their own residents who have used the LLC trick. Nevertheless, if Utah’s “idea” of how to respond to LLCs spreads, how long will it be before motorhome owners in other states get a rude awakening with their registration renewal notices?

You can read the full text of the Utah bill here.



September 28, 2020 sally Wood