New residents in the Magnolia State often get a taste of sticker shock when they have to pay for their license plates, and those costs are going up.
What makes Mississippi tags so expensive is the ad valorem property tax, levied by counties, municipalities and school districts. While each local government entity can control millage, the Mississippi Legislature controls the rate of assessment, which is 30 percent for vehicles. This is reduced over 10 years to account for depreciation. The minimum assessment of a vehicle's value is $100.
The Tax Foundation, in its last report on tangible personal property taxes in 2012, rated Mississippi's individual burden of $525 fourth-worst in the nation, just behind Virginia, Rhode Island and Missouri.
Mississippi Watchdog analyzed data for county, municipalities and school districts and found the most expensive tags in Belzoni in the Mississippi Delta. A license tag for a 2014 Toyota Camry — MSRP $22,425 — is $1,201.71; it climbs higher for a Ford F-150 pickup — MSRP $38,852 — to $2,061.61.
The costs are rising.
According to the Sun Herald, Pascagoula passed a property tax increase this year, raising rates three mills. Car owners would pay an extra $2.02 per year for an average-priced car — such as a Toyota Camry — or $3.50 for a more expensive vehicle — such as a Ford F-150. Adams County, where Natchez is located, raised its property tax rate by 2.24 mills last week, according to the Natchez Democrat.
"Additional costs like that do place additional burdens on people," said Lyman Stone, an economist for the Tax Foundation's Center for State Tax Policy. "We do generally regard personal property taxes as economically damaging. In Mississippi, you're going to need a car to get around. Purchasing a car, it's not like buying your groceries and consuming them. A car is an investment.
"It provides valuable services for years to come such as getting you to work. Some people's livelihoods depend on using their car for work and having an additional tax on that affects economic growth like property taxes on business do."
Even though that often adds up to a tag price of $400 or more, some Mississippians are happy to pay the tax, which funds schools to road maintenance and repair.
"It is the only fair tax we have," said Mary Pankey, a Starkville native. "The property tax is also very high, but not everyone pays that tax. Leave the car tags alone. (I'd) get rid of the food, grocery tax."
Millage rates for counties and municipalities are available here and there.
In comparison, Alabama's ad valorem tax is calculated using 15 percent of the vehicle's value.
Northsider Steve Wilson is a writer and a journalist. He serves as the Mississippi bureau chief for Watchdog.org.
