LANSING (WWJ) – A new tax break is officially on the books in Michigan.
Gov. Rick Snyder on Wednesday signed a bill that allows buyers of a new car, a new boat, or a new RV subtract up to $2,000 off the sales tax bill.
That means, depending on the value of a trade-in, a buyer of a $30,000 car could potentially pay sales tax on only $28,000.
“When I took office in 2011 I made it a point to go out and look for tax relief for hardworking taxpayers of Michigan,” said Rep. Andrea LaFontaine, who sponsored the bill in the House, “and I’m so happy to be here today and know that it’s finally happening; this day is finally here.”
Michigan was one of only 6 states that did not allow people to deduct a portion of trade-in value against the sales tax when buying a new car, boat or RV.
The potential deductible amount will increase an additional $500 annually over the next 25 years.
Snyder says it’s a tax break that’s great for Michigan.
“This will stimulate more sales,” Snyder said,” and cause out industries to continue to grow, because we’re proud to be a leader in vehicles, RVs, and boats in our great state.”
“So, this is something that we’re going to be phasing in over time. We’re doing this in a very financially responsible way,” he said.
Potential car buyer Todd Hardter, who attended the law signing ceremony at a dealership, and said the timing is perfect.
“We’re currently looking at purchasing a need vehicle; we’ll be trading in the one that we purchased here, and with the signing of this bill today, it’s gonna save my family money,” Hardter said.