U-Haul: A Lesson in Tax Policy

When one of us went to rent a U-Haul cargo van in Providence this weekend, he noticed it had an Arizona license plate. Then he caught sight of the other license plates in the lot. They were all from Arizona. This being the Ocean State, something seemed fishy about this. When asked about it, the clerks behind the rental desk said that all U-Haul vehicles are registered in Arizona because of the lower cost.

At $8, Arizona has the lowest annual vehicle registration fee in the country, according to this report. The national average is $33.66. So even though that U-Haul cargo van  was made in Massachusetts and based in Rhode Island, Arizona was the one getting the revenue from its license plate – not to mention all the other tax revenue generated by U-Haul operating its headquarters in the state. And, according to this Web site, the low vehicle registrations fees reflect an overall business-friendly tax and regulation environment. Just one example of how lower taxes and less regulation spurs business development.

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