Due for a refund? BMV admits overcharging 180,000 Hoosiers

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INDIANAPOLIS (Sept. 16, 2014) – Are you due for a refund?

The Indiana Bureau of Motor Vehicles “misclassified” some Hoosiers’ vehicles for excise tax purposes, meaning they overpaid when registering their vehicles.

According to Commission Don Snemis, the problem goes back to 2004, when the BMV’s System Tracking and Record Support (STARS) computer system was activated on a limited basis. The system was fully implemented in 2006.

The mix-up affects about 180,000 people, Snemis said. The state owes about $29 million plus interest, although the exact number hasn’t been finalized.

The state places a tax classification on each vehicle based on value. That value is determined by using the price of the vehicle and applying an adjustment based on Consumer Price Index data. The information then goes into the BMV’S STARS system to automatically calculate excise taxes when vehicles are registered. The system didn’t apply the adjustment in some cases, resulting in vehicles that were incorrectly classified.

Anyone who overpaid will be notified by mail and will receive a claim form to get a refund. Those letters are expected to go out in the next 30 days.

Excise tax money goes to county and local governments on a regular basis. To minimize the impact of the error on local governments, the state will cover the upfront cost of refunds and then adjust distributions to local governments over the next two years.

Gov. Mike Pence has hired an independent consulting firm to audit the BMV and its systems.