The Utah Tax Commission told the General Government Appropriations Subcommittee that the Motor Vehicles Division (DMV) collects roughly $654 million in fees in fiscal 2025 and distributes that revenue across numerous state funds, county accounts and restricted accounts.

Mike Lee, deputy executive director with the Tax Commission, said the DMV administers 85 distinct fees and provides statewide support for county motor-vehicle offices. He said the division handled roughly 500,000 phone calls annually, supports 3.5 million registered vehicles and runs 10 full DMV offices plus county support services.

"We collect 85 fees, in, the DMV, that approximates, dollars $654,000,000 for fiscal year 2025," Lee said. He outlined the distribution of fee revenue to a range of recipients including the transportation fund, restricted license-plate accounts, the Department of Public Safety, the State Board of Education (driver education fees) and county treasuries. Lee said some fee receipts return to the Tax Commission as restricted accounts and appropriations to the agency, and the DMV directly collects about $153 million in sales tax each year for vehicle sales processed in its offices.

Lee and other Tax Commission staff described the DMV’s administrative costs and the information-technology systems that support fee collection and accounting. The division allocates payroll and IT maintenance to administer motor-vehicle programs; Lee said VADERS, the DMV software that supports transactions and fee accounting, requires ongoing maintenance and programmer support. He summarized the agency’s administrative funding mix: roughly one-third from the general fund, about 31% from an electronic-payment restricted account, roughly 24% from dedicated credits and smaller shares from other sources.

Committee members queried specifics and urged simplification. Chair Thurston focused on the electronic-payment fees that the state pays to process online payments and asked whether the state had considered alternative approaches to reduce the roughly 2% processing cost paid to card vendors. "Have we ever thought about just owning our own bank so that we could pay ourselves those fees?" Chair Thurston asked, noting the cumulative cost across state government. Tax Commission staff said the agency seeks the lowest rates from vendors and is open to looking at options but did not endorse a specific alternative during the meeting.

Members also discussed the challenges of tracing fee flows into funds such as the Transportation Investment Fund and the transportation fund. Lee acknowledged the fee structure and distribution are complex and said the division is continuing work to map each fee to its ultimate fund and purpose. The committee identified the complexity of fee collection as an area for further interim work and potential simplification that would be revenue-neutral and reduce administrative burden for the Tax Commission and for taxpayers.

The committee did not take immediate action on fees at the meeting but instructed staff and agencies to continue work during the interim on clarifying fee flows, identifying candidates for consolidation and exploring options to lower electronic-payment costs.