There’s some exciting news coming out of Lansing, Michigan that is sure to bring a smile to your face and put more money in your pocket.
Both the State House and Senate passed ‘sales tax on the difference’ bills that allow consumers to deduct the value of your trade-in vehicle from the taxable value of your new vehicle.
How does it work? Simply put, the value of your trade-in is subtracted from the selling price of the vehicle you are buying or leasing before Michigan’s 6% sales tax is added in. The old way required a consumer to pay sales tax on the full selling price of the vehicle before subtracting the amount of the trade-in.
Here’s an example of what the sales tax on the difference law will look like when it’s fully implemented:
As you can see, using this example you’d be putting $600 back in your pocket. The best part (besides the extra cash) is, that as a consumer there’s no paperwork required or confusing tax documents to keep track of. Your Sales Consultant at your local LaFontaine Dealership will take care of everything for you.
However, please note that because the State of Michigan will be losing tax revenue by passing this bill, there is a provision in the legislation to ramp up the amount of your trade-in value that can be deducted from the new vehicle selling price.
In the first year, you will no longer pay Michigan’s 6% sales tax on up to $2,000 of the value of your trade-in, for a tax savings of up to $120.
The trade-in value you can subtract from the vehicle selling price will then rise $500 per year for the next 25 years (for an additional $30 tax savings each year) . When fully implemented, this change will allow trade-in values as high as $14,000 to be exempted from sales tax.
With 9 locations,18 franchises and over 3,000 New & Used vehicles to choose from, the LaFontaine Automotive Group can make sure you get The Family Deal today!
If you have any questions about the new Trade-In Tax Break, please post them in the comments section below. Thanks!
