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Why it may cost more to renew your car tag in 2022

WBRC Car tag cost
Published: May. 9, 2022 at 10:32 PM CDT
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BIRMINGHAM, Ala. (WBRC) - If it’s time to renew your car tag or register a car, you may have noticed how much the price had increased.

The Alabama Department of Revenue said the increase in payment was due to property taxes.

In a statement to WBRC, ALDOR said, “Property taxes make up a large part of what taxpayers pay. Property taxes are based on a vehicle’s fair market value as of October 1 of the prior year. Due to the recent growth in demand for used vehicles, some market values have increased, resulting in an equivalent increase in taxes.”

Property taxes are based on a vehicle’s fair market value as of October 1 of the prior year.

Whereas cars used to depreciate, because of the COVID-19 pandemic and supply chain issues, the industry expert WBRC spoke to said used cars were worth more and that meant owners would pay taxes.

“Supply chain issues will eventually catch up. But until that happens there’s not a whole lot of anything you can do. A lot of our students work at car dealerships around the state and we see it all over. It’s around the country. It’s not a local matter. It’s a national issue and everyone is feeling the same pinch,” Ford Asset Coordinator with Lawson State College John Harris said.

ALDOR said not everyone will see higher property taxes in 2022 because not all vehicles had an increase in market value.

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