President Obama Signs Auto Tax Deductions into Law

Washington DC February 18, 2009; The AIADA newsletter reported that yesterday, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009. The new law contains a provision designed to entice auto consumers back into vehicle showrooms. This provision applies to eligible purchases between February 17, 2009 and December 31, 2009. Qualifying consumers may now deduct:

• State motor vehicle sales taxes
• Local motor vehicle sales taxes
• Motor vehicle excise taxes

Consumer Qualifications:

• Individual taxpayers whose adjusted gross income is less than $125,000 per year
• Joint-filers whose combined adjusted gross income is less than $250,000 per year
• Itemizers and non-itemizers who may deduct taxes “above-the-line” on their federal tax returns

Eligible Vehicles:

• All new model year vehicles currently on dealers’ lots that have no prior purchase history
• New passenger cars and light trucks retailing up to $49,500 may collect full tax deductions. For all vehicles above this price, consumers may deduct sales taxes on the first $49,500
• The vehicle must weigh less than 8,500 pounds total