Rep. Paul Scott today unveiled a bill that allows customers to only pay the sales tax on the difference between the value of the new vehicle and trade-in.
Currently, Michigan is one of three states that do not allow the trade-in value of a vehicle to be subtracted from their total vehicle sales tax liability. This results in customers being taxed twice for their vehicles and discourages new vehicle sales in a time when our auto industry needs them most.
"The state should not be double dipping on sales tax collection," said Scott, R-Grand Blanc. "This practice is bad for business, and leads to fewer car sales."
Auto industry experts recognize the bill as not only providing a stable boost for new car sales, but that it enhances the used vehicle market by encouraging trade-ins with a customer friendly tax policy tailored to promote more vehicle transactions.
"We see this as a three-way tax cut in that it helps the manufacturers, the dealers, and most importantly, the customers," claimed Kurt Berryman of the Auto Dealers of Michigan.
Scott's bill has been enrolled in the House, and is one of several common-sense reforms aimed at streamlining the tax code in favor of consumers and businesses that the current session will consider over the coming months.
