Measuring the Impact of Suspended Licenses on State Tax Revenue

Alabama law permits the suspension of driver’s licenses for failure to pay fines, fees, or court costs. Per suspended license, it is estimated that the state expects to collect a median of $869 – a trade off for the loss of revenue from gasoline taxes and additional income tax revenue when suspension results in job loss. This report analyzes the tax revenue losses that result from the state’s debt based driver’s license suspension policies, concluding that even after the state collects the fines, fees and court costs owed, it has still lost $804.86 in tax revenue.

Read the full text of the report here

Alabama recently introduced a bill that would prohibit driver’s license suspensions for failure to pay a fine, fee, court cost or restitution imposed as a result of a traffic violation. Read about the bill here.

Peter A Jones, Ph.D.