Travelin' By RV: January 2011

Last year, I paid about $75.00 to register the Tribby in Texas. This year, to register the Tribby in colorado cost about $280.00! Wowsers! The cost to register the motoryhome here in Colorado will be horrific. Here's a posting on a blog that explains why many peeps register there RV's outta state:

One thing my friend noted is that the RV dealer salesmen and managers he talked to in Denver and Colorado Springs areas when asked what the taxes and registration fees would be, every person he talked to "had no idea" as if they'd all been trained to play the same phony script. How can you sell these things for a living and not know how much it costs to pay taxes and buy plates? You can't...but you won't tell a potential customer because he'll be SHOCKED to find out how bad the bill really is. And if you call DMV to try and get an estimate before the sale...they won't help you, either.

So I have done some digging in the Colorado tax code to shine a light on this for folks so they don't end up stunned with the equivalent of a second property tax bill for their big resource-sucking toy.

Take my friend. He bought a five-year old diesel pusher motor home...in great condition I must agree. The MSRP for that motor home in 2005 was around $225,000, and he got it for $90,000 from it's elderly owner who had to sell in a bad economy due to illness. After trying a few days before making an offer to get an idea of taxes and fees, he just decided to throw caution to the wind and pull the trigger. Bad idea...

Let's start with the Colorado ownership tax. This is a substitute for the ad valorem personal property tax. It's based on the original MSRP of the vehicle when new. Note that is NOT what the first buyer actually paid for it. Manufacturer's...List...Price. If you've ever paid list for a vehicle you are a sucker and a half. Nobody pays list (unless maybe they're trying to swing a deal with bad credit and an upside-down loan on a crappy trade-in).

For a motor home, which is "class C" property under Colorado tax code (not to be confused with Class A/B/C motorhomes), the ownership tax is computed based on 85% of that original MSRP and on the years since first registration.

Year 1 - 2.1% of 85% x the original MSRP
Year 2 - 1.5% of 85% x the original MSRP
Year 3 - 1.2% of 85% x the original MSRP
Year 4 - 0.9% of 85% x the original MSRP
Years 5-9 - 0.45% of 85% x the original MSRP
Year 10+ - $3

For a travel trailer, which is classified "Class D" property, it's the same, except that in years 10 and beyond, it remains 0.45% of 85% x the original MSRP (or $3, whichever is greater)

So for my buddy's new (to him) motor home, in year 5, his ownership tax works out to 0.45% of (85% x $225,000), or $861, and will remain the same for the next four years.

Oh, but that's not all. The registration fee is based on the vehicle's weight. For vehicles below 16,000 lbs, it's based on the vehicle's empty weight (found on the title as CWT, or curb weight, in hundreds of lbs). For vehicles over 16,000 lbs empty weight, the registration fee is based on gross (loaded) weight. My friend's diesel pavement pig comes in at 21,000 lbs with all the goodies aboard. The relevant tables that the tax dept won't even point you to can be found in CRS 42-3-306, and in the case of a motor home, in subparagraph 13. (www.michie.com/colorado is a good resource to look this up), the registration fee will be $24.50 for the first 4,500 lbs, and $0.60 per hundred lbs above that, for a total of $123.50.

Oh, but that's not all. There's the new (in 2009) SB09-108 Road Safety and Bridge Surcharges. (Department of Revenue - Division of Motor Vehicles:SB09-108 FASTER (Funding Advancement for Surface Transportation and Economic Recovery)) That's $55 between the two for a vehicle over 16,000 lbs, and will go up $8/yr for the next two years.

And there are a couple miscellaneous small fees...but that's not all.

Sales tax. An RV is taxed at the same rate as an iPod or a pair of jeans. The slick salesman will tell you that Colorado state sales tax is 2.9% out on the lot. When the final bill comes across the table, though, it'll include county, local districts, etc...in El Paso County, a total of 7.4%. Add another cool (but one-time) charge of $6,660.

So for the privelege of that first year of RV bliss, he paid the state $7,700, and he'll continue to get a bill for over $1,000 every year, just to put plates on it.

Oh, but that's not all. He hasn't told me yet what he's forking out for insurance...

Anyway, there you have it, some idea for how the numbers are derived and their sources, since neither a dealer nor DMV will tell you before the sale. And a not-so-subtle submessage: "RUN AWAY!!!"