New law means tax break for people who trade in vehicles
Starting next month, Michiganders who trade in old cars, boats, and RVs for new ones will get a tax cut. Gov. Rick Snyder signed bills today that would deduct the trade-in value of old vehicles from the taxable value of the new ones. Right now, people have to pay sales tax on the full price of the vehicle they’re buying. That’s regardless of whether they’re trading in an old one.
The plan will be phased in over a number of years. But Gov. Snyder says people will notice the difference right away.
“There will be immediate benefits to anyone buying a vehicle as soon as this law is effective, that, if you have a $2,000 exemption – that’s $120. That’s real money,” he said.
Snyder says the change will be a big help for many taxpayers. But he says it could also be a boost for Michigan’s economy.
“Hopefully this will stimulate more sales and cause our industries to continue to grow, because we’re proud to be a leader in vehicles, RVs, and boats in our great state.”
Starting next month, cars buyers will be able to exempt up to two-thousand dollars of trade-in value from the sales tax.