Hildenbrand supports measure to boost vehicle sales and save consumers tax dollars
Lansing— The Michigan Senate today approved legislation that will allow individuals to deduct the trade-in value of their vehicle from the state sales tax when purchasing a new vehicle. State Sen. Dave Hildenbrand was proud to vote for and co-sponsor this legislation that will directly impact countless Michigan consumers.
Senate Bill 126 and 127 would amend the Use Tax Act and General Sales Tax Act, respectively, to exclude from taxation the trade-in value of a used car when the trade-in value is applied to the purchase of a new or used car. The tax benefits implemented under the General Sales Tax Act would be phased in over a six-year period. For the first year, only $2,500 of the trade-in value is exempt from taxation. Each year following that amount is increased by $2,500 until the amount reaches $15,000. After that, the trade-in value is uncapped.
“Anyone trading in a vehicle stands to benefit from this tax reform,” said Hildenbrand, R-Lowell. “Michigan is the only Great Lakes state and one of only six states nationwide that essentially double taxes consumers on vehicle trade in purchases. This reform is about fairness for consumers. It acknowledges that taxes have already been paid on a vehicle and should be credited when that vehicle is traded in for a new one.”