Michigan – Bill Passed Gives Taxpayers a Break on Trade-In Value of Cars and Boats

SALT Report  3145 – Michigan Legislators passed HB 4234 (and SB 89) which reduces the amount of sales tax paid on the purchase price of a vehicle when the consumer has a trade-in vehicle.  The law states that “Beginning December 15, 2013, except as otherwise limited in this subparagraph, the agreed-upon value of a motor vehicle or recreational vehicle used as part payment of the purchase price of a new motor vehicle, used motor vehicle, new recreational vehicle, or used recreational vehicle, if the agreed-upon value is separately stated on the invoice, bill of sale, or similar document given to the purchaser. For purposes of this subparagraph, the agreed-upon value of a motor vehicle or recreational vehicle used as part payment shall be limited to the lesser of $2,000.00 or the agreed-upon value of the motor vehicle or recreational vehicle used as part payment.”  Legislation is pending Governor Snyder’s signature.

The effective date of this legislation is December 15, 2013.

For Further Information:

Michigan Legislation HB 4234 (2013)

Mlive.com – Michigan Trade-In Deal Will Cut Taxes for Car, Boat Buyers:  “We’re Giving Something Back”

The Detroit News – Snyder to Sign Tax Break for Vehicle Trade-Ins