Comments on: Sales Tax Deduction for New Car Purchases

By: Andy

Andy — Fri, 17 Jul 2009 14:39:33 +0000

With all the deductions and tax breaks out there, it is made the whole new vs used car argument lopsided. I actually saw at a recent lot that after all the deduction a new camry was only 10% more expensive than a 3 year old version!

By: ante seput

ante seput — Sun, 31 May 2009 18:21:21 +0000

I have purchase new car about two month ago, I have mention to the dealer about sales tax get back and I was told that I should check with my CPA but he was not sure about that either. Car have cost me around $32,000.00 and I did pay sales tax on it , my income
is around $60k so I am vondering would I qulified for tax back.
I am resident of New Jersey for many years,
Is possible that you can give me some high light on this. Thanks in advance!

By: Jim

Jim — Mon, 18 May 2009 20:07:54 +0000

I guess compared to Illonois, living in Long Island ain’t so bad after all…… $500k house $10k +/- taxes (65% scholl and 35% locals) based on a few factors such as year built etc….
Wnat to get the economy going, allow all intrest on financing anythng to be written off…get the boat bulding back to whre it was…Seems everytime we start heading in the right direction you people get foled and blinded politicians…..We’re worst now then some European countries needing vais etc to leave the country,,,,Police have automatic weapons on the street…Leave it to the aclu to stir the pots on things that really don’t concern them and weaken this country…what a bunch of S-heads..

By: David

David — Tue, 14 Apr 2009 00:25:33 +0000

Well at least you are not paying state income tax in Texas and get to deduct all your sales tax, not just on car purchase. Your property tax may be higher but still deductible. California has top income tax rate of 9.3% so most people deduct state income tax and cannot deduct sales tax. It makes no sense that you have to choose one or the other. Obvioulsy if you have no state income tax burden, you will “choose” to deduct your sales tax.

This is a deduction, not a credit, so no it is not “refundable”.

By: Liz F.

Liz F. — Mon, 13 Apr 2009 18:57:44 +0000

I live in Texas. I am already able to take sales tax paid plus the sales tax on any big ticket items (cars, boats, etc.).

If we bought a car this year, would be able to count the car purchase sales tax twice? Or, as I expect, we won’t get any additional benefit from this part of the stimulus package?

It looks like we are not getting much benefit from this package.

By: Alexis

Alexis — Mon, 13 Apr 2009 18:30:00 +0000

Hi,

Is this deduction refundable or non-refundable?

By: David

David — Sun, 12 Apr 2009 17:53:06 +0000

Well I do have a choice. I will probably not work so hard depending on where the tax rates go in the future. There is a breaking point. I will also cancel my planned new car purchase in 2009 out of protest.

By: David

David — Sun, 12 Apr 2009 17:46:08 +0000

I can almost tolerate credit offsetting tax liability but credit should never go beyond net zero tax. ie refund.

By the way I am just a hard working American who put in combined 160 plus hours a week with my spouse to generate my “high income’. My income is 99% from the hours I put into work, not some fancy investment return. I am just sick of getting reamed from every angle: higher tax rate, phase out of personal examption, limitation on itemized deduction, phase out of college tuition deduction, can’t contribute to Roth IRA, on and on and on. It would be nice to throw a little bone like car sales tax deduction my way. Just frustrating. Oh well, I guess I will just roll with the punches. No other choice really.

By: Sonny

Sonny — Wed, 08 Apr 2009 15:40:16 +0000

Is the credit refundable? This is often a key issue for many potential beneficiaries of any tax credit, but is almost always overlooked. If credits are not refundable, then they typically do not help the working class at all.

By: DDFD at DivorcedDadFrugalDad

DDFD at DivorcedDadFrugalDad — Thu, 02 Apr 2009 12:02:14 +0000

I certainly wouldn’t rush into a new car purchase simply because of a sales tax break . . .

By: cemccon

cemccon — Wed, 01 Apr 2009 17:41:23 +0000

At least you don’t live in Illinois, where we have outrageous property taxes (about $4,500 / year on a $175,000 house), local sales taxes at about 8% (if you eat out, you’ll notice the food-and-bevarage tax at 10%), and a flat income tax rate at 3%. Our new, excellent govenor wants to raise the income tax to 4.5% (or maybe 6%). Hooray for Illinois!

By: GM

GM — Wed, 01 Apr 2009 16:33:39 +0000

Also, Texas has huge property taxes. Consider this scenario. You have a state tax with lower property taxes. In case of a job loss, your income tax burden would shrink (because your income reduces) and since the property taxes are lower to begin with, they are manageable and you have a better shot to keep your house.

In Texas however, in the event of a job loss, you still have to make those huge property tax payments, and the local authority still has a vested interest in raising your appraisals since it is a source of revenue.

Makes me start to think if state income taxes aren’t such a bad deal after all (provided it leads to significant lowering of property taxes).

Comparing apples to apples, when I compared two similarly valued properties one in TX and the other in GA, the GA house had only about 1/3 the property taxes.

By: Nickel

Nickel — Wed, 01 Apr 2009 15:49:58 +0000

Having previously lived in a state with no state income tax, I’m not a fan. While state tax revenue is shrinking nationwide, the impact of an economic downturn is much more dramatic in a state that depends solely on sales tax revenue.

I’m also not crazy about the regressive nature of that sort of taxation. We came out ahead since we spend far less than we earn (hence, no state taxes on the money we didn’t spend), but those living paycheck-to-paycheck got reamed. The net effect is that those with lower income end up paying a higher percentage in taxes.

By: philip

philip — Wed, 01 Apr 2009 15:21:47 +0000

We run a higher consumption tax as opposed to using an income tax to pay for services. And yes we are interested in education, thanks for noticing!

By: Dime

Dime — Wed, 01 Apr 2009 15:14:00 +0000

I don’t know why Texas wouldn’t collect state taxes. It pays for things like education and prisons. I know Texas is interested in at least one of these things.

By: Nickel

Nickel — Tue, 31 Mar 2009 20:39:49 +0000

…and for those that don’t understand the significance of philip’s statement, Texas doesn’t have an income tax.

By: philip

philip — Tue, 31 Mar 2009 20:32:59 +0000

I live in Texas…

By: Nickel

Nickel — Tue, 31 Mar 2009 20:31:31 +0000

philip: Yes, if you itemize *and* take the sales tax deduction, you gain nothing. But if you itemize and tax the state income tax deduction, then you come out ahead now.

By: philip

philip — Tue, 31 Mar 2009 20:29:45 +0000

Ok, I see that I was able to do this before anyway since I itemize, I guess that I get nothing more than I would have without the stimulus… back to just being on the giving side of all this stimulus.

By: S

Tue, 31 Mar 2009 20:19:42 +0000

Figures. I bought my new car on January 29th, and so I won’t be eligible. Awesome.

By: philip

philip — Tue, 31 Mar 2009 18:43:42 +0000

Something from the stimulus package that I actually get a little bit from. By my estimate I will get about $350 from this.