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Tax Commission seeks limited dealer exemption during rollout of electronic titles
Summary
The Tax Commission asked lawmakers to consider a limited dealer fee exemption during the rollout of electronic vehicle titles so dealers can electronically title trade‑in vehicles into inventory without paying repeated title fees.
The Utah State Tax Commission urged the Senate Transportation Interim Committee to consider a limited exemption to title‑transfer fees for dealerships during the transition to electronic titling, so dealers will electronically title trade‑in vehicles into inventory without being charged repeated title fees.
Jason Gardner explained dealers often keep paper trade‑in titles on the lot rather than title them to the dealership and then title them again to the new purchaser; this practice avoids a title fee but leaves the chain of title unclear. As the state adopts electronic titles in phases, Gardner said the commission wants statutory authority allowing dealers to electronically title vehicles into inventory while waiving the retail assignment fee to preserve a clean, auditable chain of electronic title.
Committee members asked about liability and driving exposure while dealer inventory is on the road; Representative Thurston noted concerns if dealers drive unregistered trade‑ins. Gardner said the exemption could be tightly scoped to vehicles held in inventory and would apply only while the dealer owns the vehicle. The commission will include the proposal in its motor‑vehicle bill file for further discussion; no committee action was taken at the hearing.
