Motor Authority - blog Tag: tax

In a bid to stimulate the stagnating U.S. economy and give the domestic car market a boost, the Internal Revenue Service (IRS) has announced that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales and excise taxes paid for the vehicle when they file their tax return next year.

“For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman. “This deduction enables taxpayers to buy now and get cash back later on their tax returns.”

The news means that in many... In a bid to stimulate the stagnating U.S. economy and give the domestic car market a boost, the Internal Revenue Service (IRS) has announced that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales and excise taxes paid for the vehicle when they file their tax return next year. “For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman. “This deduction enables taxpayers to buy now and get cash back later on their tax returns.” The news means that in many states cars will become around 5-6% cheaper on average, while particular states such as California may have sales and local taxes of up to 9.25%. The announcement comes with some strings though, and the deduction is limited to the state and local sales and excise taxes paid on only up to $49,500 of the purchase price of a new car, light truck, motor home or motorcycle. Also, the amount of the deduction is phased out for taxpayers whose income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers. Additionally, the vehicle must have been purchased between the dates of February 16, 2009, and January 1, 2010, to qualify for the deduction. The tax breaks are part of a greater package being introduced by the Obama administration, which you can read about by clicking here. Read More

It's got a snazzy title, it's controversial, and it's already popular. No, it's not Britney Spears' new 'Circus' tour. It's a plan - called the 'Hummer Tax' - to increase the registration fee on SUVs, and it has the backing of Massachusetts Governor Deval Patrick.

Car dealers and SUV owners are already up in arms over the proposal, though exactly how much money the increase would be isn't yet clear. "It's a penalty for driving an SUV, which currently is not the popular choice. Or you're being penalized for a lifestyle choice, or maybe the fact that you have a large family and you need that size vehicle to put them in and it just doesn't... It's got a snazzy title, it's controversial, and it's already popular. No, it's not Britney Spears' new 'Circus' tour. It's a plan - called the 'Hummer Tax' - to increase the registration fee on SUVs, and it has the backing of Massachusetts Governor Deval Patrick. Car dealers and SUV owners are already up in arms over the proposal, though exactly how much money the increase would be isn't yet clear. "It's a penalty for driving an SUV, which currently is not the popular choice. Or you're being penalized for a lifestyle choice, or maybe the fact that you have a large family and you need that size vehicle to put them in and it just doesn't seem fair," Norwood, MA Cadillac Hummer Saab Village dealer Tim Lerchenfeldt told Fox News. The registration fee would also graduate payment based on fuel efficiency, offering an incentive to own a more fuel efficient vehicle. But apparently the politicians in Massachusetts don't go to the last stop on this train of thought: older cars will be penalized too, since they are less efficient that new ones. And who owns older cars? Both older and younger people tend to, as do poorer people of all ages. That makes this a regressive tax on the basic means of livelihood for a lot of people. If Massachusetts does move forward with the proposal, it will be the first state in the country with such a Hummer Tax. Massachusetts isn't all out of good ideas yet, however. Another proposal to help raise funds to fix the state's troubled transportation infrastructure is a 19 cent hike in the gasoline tax to 60 cents per gallon. Of course, the same basic criticisms that apply to the registration fee problem apply to this one, but the same argument hasn't stopped mega-states such as California or New York from driving up the gas tax. Still, Massachusetts is left facing a need for an additional $19 billion over the next 20 years, and it will have to find some way to fill that hole. Unfortunately, the solution almost always comes out of motorists' pockets.2009 Hummer Black Chrome H2Hummer H3T pickup Read More

With all the talk of the Environmental Protection Agency (EPA) reconsidering allowing states to implement their own fuel-economy emissions and regulations, and the negative flow on effects this would have on carmakers that would be forced to tailor cars to meet varying standards across the country, lawmakers in Texas have offered a glimmer of hope. The state’s Governor, Rick Perry, has revealed that he’s considering implementing a tax break for plug-in hybrid vehicles.

Late last year, the Bush administration signed a tax credit of up to $7,500 for plug-in hybrid and similar high-tech vehicles. Instead of waiting for the federal... With all the talk of the Environmental Protection Agency (EPA) reconsidering allowing states to implement their own fuel-economy emissions and regulations, and the negative flow on effects this would have on carmakers that would be forced to tailor cars to meet varying standards across the country, lawmakers in Texas have offered a glimmer of hope. The state’s Governor, Rick Perry, has revealed that he’s considering implementing a tax break for plug-in hybrid vehicles. Late last year, the Bush administration signed a tax credit of up to $7,500 for plug-in hybrid and similar high-tech vehicles. Instead of waiting for the federal law to come in, Governor Perry is looking to encourage innovation right now. Speaking the Wall Street Journal, he explained that he supports giving Texans a $5,000 incentive towards the purchase of plug-in hybrid vehicle using funds already paid to reduce emissions. If it passes Texas legislature, the proposed incentive would be in addition to the federal government’s own plug-in hybrid credit. This means that some buyers would be able to receive up to $12,500 off the price of a new car such as the upcoming Chevrolet Volt. The story doesn’t end there as the federal government’s maximum tax credit could jump as high as $10,000 if a proposed adjustment in the $700 billion stimulus bill being considered in Washington goes ahead. The only downside to all these credits is that they will come with a limit to how many individual vehicle sales will be eligible. The proposed limit currently stands at 500,000 vehicles, which means if you bought the 500,001st plug-in hybrid you would not get a credit.2011 Chevrolet Volt Production model Read More

Tax credits designed to give buyers incentives to buy more efficient cars are anything but new - the Toyota Prius has benefited from similar schemes for several years. Now Ford's Fusion Hybrid, as well as the Mercury Milan Hybrid, qualify for the maximum tax credit as well, giving buyers a $3,400 break on the purchase of either of the cars.

Since both the Milan and Fusion rely on identical powertrains in very similar packages differentiated only by specification, both cars qualify for the credit. Their fuel efficiency ratings also certified them as the most efficient mid-sized cars in the U.S. with 41/36mpg city/highway ratings, beating the... Tax credits designed to give buyers incentives to buy more efficient cars are anything but new - the Toyota Prius has benefited from similar schemes for several years. Now Ford's Fusion Hybrid, as well as the Mercury Milan Hybrid, qualify for the maximum tax credit as well, giving buyers a $3,400 break on the purchase of either of the cars. Since both the Milan and Fusion rely on identical powertrains in very similar packages differentiated only by specification, both cars qualify for the credit. Their fuel efficiency ratings also certified them as the most efficient mid-sized cars in the U.S. with 41/36mpg city/highway ratings, beating the Camry hybrid by 8mpg in the city and 2mpg on the highway. Toyota disputes the comparison, noting that the Camry is somewhat larger than the Fusion, and arguing that the Prius is more properly the Fusion Hybrid's competition. Whatever the comparison, however, the tax incentive can only do good for the hybrid segment, which has foundered since fuel prices fell from record high levels last year. "We're glad to see our government help promote these advanced, clean fuel-efficient vehicles to the consumer," said Derrick Kuzak, Ford's group vice president of global product development. The Fusion's strong fuel economy comes from its all-new hybrid powertrain design, plus several features incorporated into the electronics system, including the new SmartGauge system, an enhanced electronic throttle control and a highly efficient regenerative braking system. For more on the Fusion and Milan Hybrids, read our original coverage here.2010 Mercury Milan and Milan Hybrid2010 Ford Fusion Hybrid Read More