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Commissioner: Oklahoma license plate law costs the state millions

TULSA — Oklahoma is one of only eight states where a license plate stays with the vehicle, rather than the original owner, when it’s sold.

That, according to Oklahoma Used Motor Vehicle and Parts Commissioner Terry Shreve, is costing the state somewhere between $18 millon and $30 million dollars a year - 36% of which would be helping to fund education.

The issue is that someone can buy a vehicle from an individual when the existing tag is unexpired, and easily drive that vehicle for months without registering it.

“There’s a lot of people in Oklahoma that will buy a car, and they’re not necessarily a bad person, but they’ll say ‘well, I’ll get around to registering it.’ Well, the tag’s good for six or eight months and they just drive it around for six or eight months for whatever reason, and say ‘well, yeah, I’ve been meaning to register it,” Shreve told KRMG Thursday.

Eventually, the state may catch up on the money when the buyer finally registers the vehicle.

But there’s also a scheme called “title jumping,” which Shreve estimates involves hundreds of vehicles a day.

The buyer has the seller sign the title, without dating or notarizing it.

They then sell the car, possibly after driving it for several months, putting the new buyer’s name on the title as if they were the original buyer.

They avoid paying sales tax, excise tax, and other fees, and when the new owner goes to register the vehicle, it appears the sale happened within the last 30 days.

The state loses the money from the sales tax that was never paid on the first purchase, and from the additional registration and fees that should have been paid from the initial sale.

It’s also unlikely that the vehicle was ever insured while it was driven by the initial buyer, and insured drivers pay higher premiums because Oklahoma leads the nation in uninsured motorists.

A lot of that lost money that should have been paid would have gone toward education, Shreve points out.

“Sales tax, excise tax, tag registration, title transfers and all - approximately 36 percent of that money goes to the public school systems in Oklahoma,” he said.

There are other issues.

For example, law enforcement officers pulling over a vehicle that has a plate still registered to someone with a clean record, while the driver could actually be a convicted felon with a long history of violence.

And the Oklahoma turnpikes lose millions of dollars a year, because drivers whose tags aren’t registered under their names are much more likely to ignore tolls.

That’s also a problem in Kansas and Texas, whose toll road systems are tied in with Oklahoma’s.

Shreve says the answer is simple, just do what 42 other states do and have the tag stay with the owner.

Legislators, he says, are aware of the issue but so far have done nothing to fix it.

“This is a one-time fix. Whatever amount of money it takes, and time, to fix this one time - that’s all the money we’ll ever have to spend on it, and it will generate this revenue every year,” he told KRMG.

He urges people to contact their legislators and ask them to take action.

NOTE ON CORRECTION: In its original version, this story contained information that was inaccurate. You do not, by law, have to prove ownership of a vehicle to insure it in the State of Oklahoma.

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