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IMPORTANT ANNOUNCEMENT
American Recovery and Reinvestment Act of 2009
Based on the passing of the Recovery Act the following provisions will soon apply to qualified purchases of new motor vehicles. Please be advised that these new provisions will not apply to any purchases made prior to the Bill being signed by the President. As the Bill is expected to be signed into law tomorrow, we will notify you as soon as that occurs. Please note an early version of this legislation included federal deductibility of auto loan interest, but that provision is not in the final Bill. Below is short summary of the 2009 Recovery Act provisions describing the tax deduction now permitted for qualified motor vehicle taxes.
The key points are: - When is this effective? For purchases of qualified motor vehicles on or after the date of enactment and through December 31, 2009.
- What taxes are deductible? Motor Vehicle Sales Taxes and Motor Vehicle Excise Taxes (not applicable in Ohio) are deductible
- What customers qualify? Qualifying customers are customers with a modified adjusted gross income (“AGI”) of less than $125,000 ($250,000 for joint return). Note that a partial deduction is allowable for customers with income greater than $125,000 but less than $135,000 ($250,000 and $260,000 respectively, for joint returns).
- What new vehicles qualify for the deduction? Deduction applies to NEW vehicles only (passenger car, light duty truck, motorcycle, motor home).
- Vehicles must also be under 8,500 pounds gross vehicle weight.
- Applies to new vehicles of any model year so long as the original use commences with the taxpayer.
- Any vehicle sold for under $49,500 qualifies for the full deduction.
- For vehicles sold for more than $49,500 the deduction is limited to tax on first $49,500 of purchase price.
- How does the deduction work? Deductible as an “above the line” deduction on federal tax return.
- Customer gets the tax benefit even if they can’t “itemize” other tax deductions.
- Deduction IS allowable for the alternative minimum tax (AMT)
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Sharpnack II Chevrolet Buick Pontiac is a Willard, OH. dealer. .
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