Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions
 

Senate looks at breaks on auto sales tax till Dec. 31 as part of overall stimulus bill

November 15, 2010

As part of the broad economic stimulus bill on Capitol Hill, the Senate moved Feb. 3 to allow consumers to deduct the loan interest they pay on new vehicles bought this year.

Named the Auto Ownership Tax Assistance amendment, the legislation would allow consumers to deduct interest paid on auto loans and state sales and excise taxes from all interest payments on new vehicles purchased between Nov. 12, 2008, and Dec. 31, 2009.

Families who make up to $250,000 a year could apply the relief to vehicles that sell for up to $49,500. Individuals with less than $125,000 a year also would get a break. On average, the bill would allow families to save about $1,553 on a vehicle with a $25,000 sticker price.

Legislation supporters said the auto incentive would help by immediately providing state and local governments with critically needed tax revenue; by saving "Main Street" jobs; and by providing relief to consumers.

"Most states and many municipalities rely heavily on motor vehicle sales/excise taxes," the National Automobile Dealers Association wrote in support of the measure. "Sales of new and used cars, as well as parts and service, are the single largest source of sales tax revenue for almost every state, city and county government."

On Main Street, the NADA notes that more than 100,000 jobs were lost in the automotive retail employment sector in 2008, and that nearly 1,000 dealerships—with an average 52 employees—closed in 2008. "Without a specific auto incentive," the NADA argues, "many more auto jobs could be lost in 2009."

The NADA urges all dealers to contact their senators to support the legislation, introduced by Sen. Barbara Mikulski (D-Md.).

"Increasing consumer traffic in dealerships during this unprecedented economic turndown will help prevent dealership closings and keep workers employed," an NADA news release states. "This will help prevent foreclosures, shuttered storefronts and idle real estate, which only extends the recession."

 

Back