Kansas nears sunset of ad valorem tax on motor carriers

By Keith Goble, Land Line state legislative editor | Wednesday, October 16, 2013

A cost savings for the state of Kansas that will benefit many truckers is quickly approaching.

The state is preparing to do away with the long-running motor carrier property tax, or ad valorem. The 57-year-old tax is based on the value of rolling stock and is collected on motor carriers, regardless of baseplate, that use Kansas roads.

Effective Jan. 1, 2014, the state will cease collection of the tax in exchange for an additional registration fee applied to intrastate and interstate operations. Out-of-state truckers will pay the tax through the International Registration Plan.

The change was approved by state lawmakers in 2012, but the implementation was delayed until the first of next year. In the meantime, the ad valorem tax has continued to be applied for the 2012 and 2013 tax years.

Once implemented, the new commercial vehicle fee will be $400 a year for tractor-trailers in excess of 60,000 pounds and registered through IRP. Trucks registered with this fee will be eligible for apportioned registration.

The change is expected to be a cost savings for truckers and the state.

According to a state analysis, although the new law will result in lost revenue for the state, it will save money that typically was needed to keep the program running. Specifically, trucking-related functions that are performed by three divisions at the Kansas Department of Revenue will be consolidated.

Advocates said there will be an increase in payments from interstate operations, which would pay the new fee along with the apportioned registration. As a result, they say the change amounts to a wash for the state.

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