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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
alternative fuel vehicles; VLT
Purpose
Modifies the calculation of vehicle valuation for vehicle license tax (VLT) purposes for alternative fuel vehicles.
Background
A VLT is constitutionally required for each year of a vehicle's registration (Ariz. Const. art. 9, § 11). The VLT decreases with the age of the vehicle and a minimum VLT for a gasoline‑powered vehicle is $10 per year (A.R.S. Title 28, Chapter 16, Art. 3).
A vehicle powered by electricity, solar energy, alcohol fuel, certain approved gasses or certain fuel blends is classified as an alternative fuel vehicle for purposes of calculating VLT. For an alternative fuel vehicle, the VLT is $4 for each $100 of the vehicle's value, which is calculated as a percentage of the manufacturer's base retail price of the motor vehicle set by the Director of the Arizona Department of Transportation (Director) decreasing by 15 percent each year. The minimum VLT for alternative fuel vehicles is $5 per year (A.R.S. §§ 1-215 and 28-5805).
Laws 2018, Chapter 265 implemented changes that altered the manner in which the VLT for alternative fuel vehicles is calculated. Vehicles purchased before January 1, 2020, would be valued based on a percentage set by the Director of the manufacturer's base retail price, decreasing by 15 percent of the manufacturer's base retail price each year after the first year of registration. VLT for alternative fuel vehicles with less than 10,000 pounds of gross weight purchased after January 1, 2020, are calculated at 30 percent of the manufacturer's base retail price decreasing by 15 percent of the value for the preceding 12-month period each year after registration. Alternative fuel vehicles with more than 10,000 pounds of gross weight purchased after January 1, 2020, were removed from the separate classification for alternative VLT calculation.
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires, beginning January 1, 2022, the VLT for an alternative fuel vehicle previously registered in Arizona be based on a value that is 1 percent of the manufacturer's base retail price decreasing by 15 percent of the value for the preceding 12-month period each year after the first year of registration.
3. Requires the VLT for an alternative fuel vehicle initially registered in Arizona in the year 2023 to be calculated as 40 percent of the manufacturer's base retail price, decreasing by 15 percent of the preceding 12-month period for each year after the first year of registration.
4. Requires the VLT for an alternative fuel vehicle purchased on January 1, 2024, and after to be calculated in the same manner as non-alternative fuel vehicles.
5. Removes gross weight specifications for the calculation of VLT for alternative fuel vehicles.
6. Makes technical and conforming changes.
7. Becomes effective on January 1, 2020.
Prepared by Senate Research
February 11, 2019
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