The House today voted 91-0 to approve House Bill 1912, which will reduce the sales tax on used vehicles and trailers costing from $4,000 to $10,000 from 6.5 to 3.5 percent.

This cleared the way for passage of the Medicaid appropriation bill, itself necessary for the completion of the omnibus state budget bill. According to comments Tuesday, the passage of the Medicaid bill should mean the revenue stabilization act can be completed, along with the legislative session, next week. The legislative will not adjourn but go into recess for the possibility it can reconvene when the Census is completed to deal with legislative redistricting.


The approval of HB 1912, carried by Rep. John Payton (R-Wilburn) followed extensive back and forth on competing bills to reduce the tax on used cars.

A competing House bill would have raised the exemption of the sales tax on used vehicles from $4,000 to $7,500, but it was viewed as unpassable in the Senate.


The compromise on HB 1912 set the stage for approval of SB 55, to fund the expanded state Medicaid program on the fifth try. It had gotten 72 on the fourth vote, but several holdouts were pressing for a deal on the used car tax.

With the deal struck, the Medicaid bill was approved 78-15, with three voting present.


The sales tax cut will mean lost revenue to the state of $13 million a year. The Medicaid appropriation is for $9 billion