Luxury Tax On High Priced Cars Slowly Going Away

07/19/96

Auto dealer lobbies have been fighting the luxury tax on cars priced over $35,000 for years. They say it stifles new car sales in some areas. The present luxo tax is 10%, but a bill going to President Clinton cuts the tax down to 8% effective January 1997, and would drop it in increments from there down to 0% by January 2003. The President is expected to sign the bill. Stop and think what Mike Tyson must have paid in "overage" assessments when he purchased five Bentley Azure convertibles several months ago. 10% gas guzzler tax, 7-3/4% sales tax, and a 10% luxury tax on top of each car at a cost of $250,000. Ouch.

Bill Maloney -- The Auto Channel