Thursday, March 5, 2009

Obama's gift to car buyers: deduct the sales tax

Kyle Northway over at Jim Burke Ford sent me an email reminder about a valentine in the Obama stimulus plan that directly benefits car buyers: purchase a new car in 2009 and you can deduct the state or local sales or excise taxes. There are of course income restrictions (if you make over $250,000 a year, forget it) but the local car dealers are hoping this provides a much needed stimulus to car sales, which have been just awful. Plus, as Kyle correctly notes, buyers can save even more if they avoid the increases in the state sales tax (effective April 1) and the increase in the vehicle license fee starting May 19. Kyle says the deduction is limited to purchases up to $49,500, which is more than enough to buy you a mighty sweet Ford over at the Jim Burke lot. The local guys certainly can use a boost: In February GM, Ford and Chrysler saw sales drop 52.9%, 48.4% and 44% respectively. The imports didn't fare much better, with Toyota down 37.3% and Nissan down 37.1%.

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