Board Of Equalization Member Accuses DMV Of Overcharging Taxpayers

LOS ANGELES (CBSLA.com) — The Department of Motor Vehicles has been overcharging California consumers when they pay taxes on their vehicle purchases, according to a member of the state Board of Equalization.

A letter publicized this week was sent by the Board of Equalization's George Runner to the DMV's director, Jean Shimoto (pdf). The letter takes the DMV to task for its refusal to use an online tool created by the Board of Equalization in 2013 that allows users to determine sales tax based on their addresses.

"However, after continued complaints from taxpayers, it is clear that DMV offices have failed to institute use of the BOE's tax rate lookup website to determine the correct amount of tax to charge," according to the letter, which is dated Aug. 20.

The letter notes that sales and use tax rates vary widely across the state. Car purchases are subject to statewide sales and use tax rate of 7.5 percent, as well as voter-approved local and district taxes. Sales taxes on vehicle purchases are typically calculated based on zip code, but because zip codes can often straddle city and county lines with different tax rates, a taxpayer in one area of a zip code could pay a higher tax rate than another in the same zip code, Runner said.

"I find it difficult to understand why your agency would knowingly continue to mischarge taxpayers when the Board of Equalization has developed an extremely accurate tool for determining tax rates at specific locations," Runner said.

The issue is not as urgent or as wide-ranging as Runner makes it out to be, DMV spokesman Armando Botello said.

DMV and Board of Equalization officials discussed the issue before Runner sent the letter, which also does not note that this tax discrepancy only affects people who buy from private owners and only in situations where the zip code is split between a city and county.

There was no estimate on how many people this tax discrepancy might affect, Botello said.

Additionally, the tax at issue is not going toward the DMV.

"The money we collect, we collect on behalf of the BOE. This is not DMV money," Botello said. "We are following their guidelines using the zip codes. Now they want us to change."

As for reports saying the DMV might begin issuing refunds, Botello said the discussion between the two agencies have not yet reached that point.

"And if there are, they probably would have to be from the BOE," he said.