Only Weeks Remain to Take Advantage of 2009 Consumer and Business Tax Incentives
With the ‘cash for clunkers’ sales frenzy over, now is a great time to remind consumers that they can still take advantage of the generous tax deduction for state sales taxes (and some other state fees) on the purchase of a qualifying new vehicle before Dec. 31st. NADA was instrumental in the passage of this provision. These savings will not be available after December 31, 2009, so customers should know that now is still a great time to buy. As well, there are still green vehicle tax incentives for hybrids, diesels and alternative fuel vehicles (follow link below).
As the economy slowly recovers, it is also the perfect opportunity for dealers to remind small business customers that they have just a few weeks left in 2009 to take advantage of generous accelerated depreciation and expensing tax incentives on the purchase of certain qualifying business vehicles (extended in the February stimulus bill, The American Recovery and Reinvestment Act of 2009).
Congress also recently passed an extension of a net operating loss (NOL) provision which will help struggling dealers. The provision was modified to provide businesses of all sizes with a tax break allowing them to carry back losses to get refunds on taxes paid over the past five years. On Nov. 6, President Obama signed the bill into law (PL 111-92). This tax break will help the cash flow of struggling dealers of all sizes as the economy slowly recovers.
The links below provide quick reference guides of the tax incentives from the Stimulus Bill, but do not provide a comprehensive reference for all tax situations. As always, note that the guides are simply summaries and NADA encourages dealers, consumers, and businesses to contact their preferred tax professional for further details.
Links to Resources
Consumer
IRS Website: Guidance on New Vehicle Sales/Excise Tax Deduction
Sales Tax Deduction Showroom Flyer (
.pdf)
IRS: “Seven Facts about the New Sales Tax Deduction for Vehicle Purchases" (.doc)
Guidance for States without Sales Tax (.doc)
Fueleconomy.gov: Guidance to Hybrid, Diesel, Alt. Fuel and Plug In Tax Credits
Business
Bonus Depreciation and Small Business Expensing (.doc)
Updated Guide to Net Operating Loss (NOL) ( .pdf)