204. I had adjusted vehicle taxes last year, but there is still scope to make them more progressive.
a. I will adjust the Additional Registration Fee, or ARF, rates to better differentiate between the higher-end cars, and also tax luxury cars at a higher rate. Buyers of cars with Open Market Value, or OMV, of more than $40,000 will pay higher marginal ARF rates than they do today. And in particular, for the highest OMV tier, the revised ARF rates will be 320%, up from 220% today.
b. Currently, the Preferential ARF rebates are sized as a percentage of the payable ARF. I will cap the Preferential ARF rebates at $60,000 to avoid providing excessive rebates to more expensive cars when they are deregistered.
205. These changes are expected to affect the top one-third of cars by OMV. Buyers of cars with an OMV of $40,000 or less will be not be affected