CONSUMER AUTO INCENTIVE INCLUDED IN FINAL STIMULUS BILL

February 17, 2009
*** UPDATE: INCENTIVE EFFECTIVE FEBRUARY 17 ***
CONSUMER AUTO INCENTIVE INCLUDED IN FINAL STIMULUS BILL (H.R. 1)“AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009” Today, President Obama signed the American Recovery and Reinvestment Act of 2009. On February 13, the House approved the bill by a vote of 246-183 and the Senate passed the package by a vote of 60-38. What Taxes are Deductible? 1• State Motor Vehicle Sales• Local Motor Vehicle Sales• Motor Vehicle Excise TaxesWhat Customers Qualify for the Deduction?• Individual customers with modified adjusted gross income of less than $125,000 or joint-filers making less than $250,000 a year in 2009 would qualify for the deduction.• Deductible as an “above the line” (for itemizers and non-itemizers) deduction on federal tax return.Effective Date• New vehicle purchases shall apply to purchases on or after the date of enactment (February 17, 2009) until December 31, 2009.What New Vehicles Qualify for the Deduction?• Any new vehicle not more than 8,500 pounds gross vehicle weight.• New vehicles of any model year – when the original use commences with the taxpayer.• Any vehicle sold for under $49,500 qualifies for the full deduction. Consumers may deduct sales taxes on the first $49,500 of any vehicle sold above this price.THIS IS A GENERALIZED SUMMARY. Tax savings will depend on one’s individual tax rate. For more specific information on eligible customers, taxes and applicability, dealers are encouraged to consult with an accountant or tax professional.1 “For purposes of this section, the term ‘qualified motor vehicle taxes’ means any state or local sales or excise tax imposed on the purchase of a qualified motor vehicle.”

Information from NADA.org