Frank Parra Chevrolet

President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009 which is more commonly known as "the Stimulus Bill". One of the highlights of this Bill is a sales and excise tax deduction for Customers who purchase a new vehicle in 2009. This provision applies to eligible purchases between February 17, 2009 and December 31, 2009.

 
Qualifying consumers may now deduct:

• State motor vehicle sales taxes

• Local motor vehicle sales taxes

• Motor vehicle excise taxes

There is no provision for leases in the stimulus bill, and therefore no tax benefit to the consumer for a lease.

Consumer Qualifications:

• Individual taxpayers whose adjusted gross income is less than $125,000 per year

• Joint-filers whose combined adjusted gross income is less than $250,000 per year

• Itemizers and non-itemizers who may deduct taxes "above-the-line" on their federal tax returns

Eligible Vehicles:

• All new model year vehicles currently on dealers' lots that have no prior purchase history

• New passenger cars and light trucks retailing up to $49,500 may collect full tax deductions. For  all vehicles above this price, consumers may deduct sales taxes on the first $49,500

• The vehicle must weigh less than 8,500 pounds total.

Please consult your tax advisor or the government web site for specific details on the tax deduction calculation and eligibility conditions.