One imagines the classic rites of passage where young people are sent out into the wild, facing fears and self-doubt, navigating the uncertainty of their surroundings, and then returning as adults.
While most families in Arkansas don't send their kids into the wild to reach adulthood, we certainly have a rite of passage to "adulting" for our young people, and that is the moment a car title bears their name. In that moment, we send them out into the state revenue office, ill-equipped to understand the terrain of various government agencies and the requirements of owning that car.
While the details are fuzzy, my recollection of this adulting rite of passage is "truthy" enough. There I was in my 20s, standing in the middle of the revenue office, heart pounding and grabbing a number. I was a new graduate from the Harvard Kennedy School, ironically realizing how useless that public policy degree was for this one big real-life moment. All I knew was that I was trying to get that little colorful sticky thing with a year on it for my license plate. Beyond that, I knew very little.
My number was called, and when they looked up my name they told me that I hadn't paid my taxes and had to go to the tax window. I felt a little confused because I remembered having paid taxes last year when I bought the car. When I got to the front of line for the "taxes" window, they told me my car had not yet been assessed.
My car was not wha???
Here it is -- the moment of fight or flight. My brain is now yelling: "Forget the sticker! Run for your life!" But I stayed the course. I assessed, then paid my taxes at the next window, and took a number for the DMV. I even got cocky enough to mimic the pros waiting for their turn to register and successfully conjured a "bored look." Then I walked out of there with a sticker and registration. From then on, while I lacked all understanding of why, I knew the the process.
I became an adult that day.
Sadly the actions that enterprising leaders of this state and county agencies have taken over the past decade are robbing young people of many crucial pieces of this rite of passage, namely with better technology and communication strategies. In the most obvious sign of governmental coddling, Ms. Debra Buckner, the county treasurer, told me she will even accept PayPal.
Yet, despite these helicopter government strategies, young people are still getting it wrong. So please forward this column to young people in your life between the ages of 18 and 25, unless you want them to suffer like you probably did when you had to walk to the revenue office in the snow, uphill, both ways.
So let's start at the beginning.
How to adult your new car:
You drive your new car off the lot, and it's pretty obvious some adulting needs to happen. The temporary tags give us a hint. A big hint. The clock is ticking. Most importantly, we have to pay our sales tax to the state and register the car with the state within 30 days. Depending on how fancy the car, the taxes can be a substantial amount, which is why Scott Hardin, spokesperson for the Arkansas Department of Finance and Administration, recommends that you budget for that payment when you purchase the car. Otherwise, you could be like the 29,311 people currently driving around with expired temporary tags, many of whom probably, for one reason or another, can't write a check for that amount.
But you also have to assess your vehicle with the county in order to get the car registered. Why? Well, next year you will have to pay taxes. Oh, I see your confused face. No, not sales taxes but annual COUNTY taxes on the value of your car based on a complicated calculation called a millage. Try googling "millage" and you will find yourself more confused than when you started. OK, but let's not get distracted. This is not about understanding, after all.
With that assessment, the county will be able to create a tax bill that you will pay the following year. Karla Burnett, chief administrator for the Pulaski County assessor, said the first-time car purchaser can do this painlessly over the phone by calling (501) 340-6170 or in person by walking into the office. Once the car's Vehicle Identification Number (VIN) is in the system, subsequent annual assessments can then be handled online.
OK, so your new car is assessed, and presuming you have gotten car insurance, then you can pay your sales taxes and register your car at the DMV. Just like the assessor, Hardin suggests the first-time car owner or titleholder should do this in person. The representatives can help you understand this process of registration every year and getting that little sticker thing for your plate and registration for your glove box.
You will give them your address, but Hardin recommends giving them an email address as well. Young people move every 6.2 months, my "truthy" statistic, and while I am sure it is always top of mind to update your address with the state and the county when you move, play it safe and give them an email. Problem solved.
Now your car is registered. All done? Not so fast.
Every year you will have to assess with the county assessor, pay property taxes with the county treasurer and register with the state DMV.
Your first stop is always the county assessor. You have from January 1 to May 31st to assess your car and then until October 15 to pay your taxes to the treasurer based on the prior year's assessment. Funny enough, young adulting aspirants, you know what they call people who don't assess by May 31 or pay taxes by October 31? Delinquents! But being delinquent is expensive, like 10% penalty expensive. Adulting pays (less).
Fun fact: Burnett warned that "Jan. 2 is the worst day to try to do this because everyone tries to do it that day. They are slammed." I bet there is a high correlation between Jan. 2 assessors and Save Yourself readers. So just set a recurring reminder to do it Jan. 3.
Again, Ms. Burnett urged folks to offer your email address, and then every year they will send you a reminder to assess your car!
Next you will pay personal property taxes on your car every year based on its value derived from the assessment, and you pay those with the county treasurer's office. For this step, I interviewed the Pulaski County Treasurer Debra Buckner. She was excited about this tutorial and confirmed that it is absolutely young people who are failing to follow these steps.
"Tell your children how to do this," Buckner said. "Don't let them go delinquent. This is something that gets lost in transition from teenage early college years to adulthood as vehicles are handed over to children and they don't know what to do then. Parents have always taken care of it."
Paying property taxes is very simple, but just be aware that they need to be paid by Oct. 31. If you give the treasurer's office an email address, then it will send an email around February that it has "opened the books." This means that the assessments from the prior year have been calculated and tax bills are available to be paid. Buckner stressed that they are making this as easy as possible. You can pay by PayPal, credit card or monthly auto bank drafts if you can't pay it all at once. You can also pay by check -- a column explaining what a check is will be forthcoming.
Assessing and paying property taxes annually means that when your car is due to be registered (the month you bought it), you will be current in the state's system and free to complete your registration online. Days later, those little stickers and your new registration will be mailed to you. Put the sticker on the license plate and tuck that registration in the glove box with your proof of car insurance.
I am so grateful for the conversations with Scott Hardin, Karla Burnett and Debra Buckner. They are all representing the lengths that all the agencies are going to for making each piece of adulting car ownership as frictionless as possible, from email prompts to convenient payment options.
But as much as they have streamlined these processes, they can't overcome the nature of the ownership legalities. All three agencies are separate with their own processes and taxation as dictated by Arkansas law. So while I have explained the process to new car owners as best I can, if you want an explanation for why it works this way to adult a car, my best response as an experienced parent is...
"Because they said so."
Sarah Catherine Gutierrez is founder, partner and CEO of Aptus Financial in Little Rock. She is also author of the book "But First, Save 10: The One Simple Money Move That Will Change Your Life," published by Et Alia Press. Contact her at sc@aptusfinancial.com.