President Obama Signs Auto Tax Deductions

February 18, 2009

President Obama Signs Auto Tax Deductions into Law
Yesterday, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009. The new law contains a provision designed to entice auto consumers back into vehicle showrooms. This provision applies to eligible purchases between February 17, 2009 and December 31, 2009. Qualifying consumers may now deduct:
? State motor vehicle sales taxes
? Local motor vehicle sales taxes
? Motor vehicle excise taxes
Consumer Qualifications:
? Individual taxpayers whose adjusted gross income is less than $125,000 per year
? Joint-filers whose combined adjusted gross income is less than $250,000 per year
? Itemizers and non-itemizers who may deduct taxes “above-the-line” on their federal tax returns
Eligible Vehicles:
? All new model year vehicles currently on dealers’ lots that have no prior purchase history
? New passenger cars and light trucks retailing up to $49,500 may collect full tax deductions. For
  all vehicles above this price, consumers may deduct sales taxes on the first $49,500
? The vehicle must weigh less than 8,500 pounds total

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