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?
• State Motor Vehicle Sales
• Local Motor Vehicle Sales
• Motor Vehicle Excise Taxes
What 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 under 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.
Tax savings will depend on one’s
individual tax rate. For more specific information on eligible
customers, taxes and applicability, buyers are encouraged to consult
their tax professional.
“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.”
