The tax write-off passed by Congress in February and mentioned Monday by President Barack Obama is helping dealers close some new-car sales, says National Automobile Dealers Association spokesman David Hyatt.
The deduction covers the taxes paid on new cars, light trucks, motor homes and motorcycles up to $49,500. Individual taxpayers making up to $135,000 can get the full write off, while those who file jointly can have an income as high as $260,000 to claim at least part of the deduction.
President Barack Obama mentioned the initiative Monday during a discussion on the General Motors and Chrysler LLC bailouts.
For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year, IRS Commissioner Doug Shulman said in a Monday statement. This deduction enables taxpayers to buy now and get cash back later on their tax returns.
The IRS says the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, to be eligible.
I was talking to dealers yesterday about this, Hyatt told Automotive News. I asked a salesmen if he used the tax write-off as a talking point. He said it was a welcome thing that hes used to close some deals, Hyatt said.
The NADA was instrumental in getting the provision included in the stimulus packaged that passed in February. Hyatt said the NADA may seek to have the program extended by Dec. 31 if auto sales still have not recovered.