Residents who trade in used vehicle may get a tax break - ABC 12 – WJRT – Flint, MI

Residents who trade in used vehicle may get a tax break


(10/22/13) - Michigan residents who trade in a used vehicle for a new one might be in line for a tax break.

That's after a deal was reached between lawmakers and the governor Tuesday in Lansing.

The State House and Senate voted Tuesday to phase out a requirement that charges sales tax on the full price of a car, RV or boat without subtracting the value of a trade-in.

The bill is expected to get final approval on Wednesday.

It started out with plenty of support from members of both parties, but Gov. Snyder's office had expressed concerns that the lost tax revenue could affect the state's ability to meet fiscal obligations.

A spokesperson for the House Speakers office says starting in December, buyers won't pay six percent sales tax on$2,000 or on the value of a trade-in, whichever amount is less.

Larger tax breaks will be phased in over the next several years.

A Mid-Michigan dealership thinks this will help the state's economy in the long run.

"I think people would look at it as their bottom line, their payment, they might think about considering moving up to a brand new vehicle if the prices are great, and they might say let's get rid of our used vehicle and go into a new one. It's going to help the bottom line any way you look at it, wether you look at $100 or $200 in savings, that affects their payment in the end," said Jeannine Ferguson, a sales manager with Applegate Chevrolet.

This bill still has to go to Gov. Snyder's office. He's expected to sign it.

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