I bought my Prius in Dec 2008. Now if you buy a car in 2009 there is no sales tax. That sucks. If I'd waited 2 months I'd have no sales tax to pay AND get a huge discount off the car. Bummer. I thought I read online that some of the 2009 "no sales tax" rule would be back dated to Nov 2008 - does anyone know if this is true?
I've been keeping an eye on this myself as I hope to buy a Prius quite soon. Senator Mikulski's web site (she sponsored the amendment) has an FAQ about the deduction; it says the deduction is "for new cars purchased from enactment through December 31, 2009." I think this means we have to wait for Obama to sign it. More details here: [I'm new to prius chat so can't post a real link] mikulski.senate.gov/record.cfm?id=308250& I figure this will save me a little over $400. Originally they were going to let you deduct interest payments in 2009 as well, so it's less generous now.
For tax years beginning after Dec. 31, 2008, the Recovery Act adds an increased standard deduction for qualified motor vehicle taxes. (Code Sec. 164(b)(6) and Code Sec. 63(c)(1)(E), as amended by Act Sec. 1008) Qualified motor vehicle taxes are State or local sales or excise taxes imposed on the purchase of a qualified motor vehicle. (Code Sec. 164(b)(6)(A)) Only taxes on a that portion of the cost of qualified motor vehicle not exceeding $49,500 ($24,750 for a married person filing separately) may be deducted. (Code Sec. 164(b)(6)() The amount of sales or excise taxes that may be treated as qualified motor vehicle taxes is phased out ratably for a taxpayer with modified AGI between $125,000 and $135,00 ($250,000 and $260,000 on a joint return). (Code Sec. 164(b)(6)(C)) A qualified motor vehicle is a (1) passenger automobile, light truck or motorcycle the gross vehicle rating of which is not more than 8,500 pounds and (2) a motor home the original use of which commences with the taxpayer. (Code Sec. 164(b)(6)(D)) The deduction for qualified motor vehicle taxes is not available to a taxpayer who elects to deduct state and local sales and uses in lieu of income taxes as an itemized deduction. (Code Sec. 164(b)(6)(F)) The deduction for qualified motor vehicle taxes is allowed in computing the AMT. (Code Sec. 56(b)(1)(E))
So I guess I'm still not quite sure– does the deduction for taxes paid cover all purchases in 2009, or only those after the bill is signed this Tuesday?
If the summary is correct, all purchases during 2009. I haven't been industrious enough to read the bill myself.
