The motor vehicle sales tax deduction: Not always a smooth ride

摘要

Under the heading, "Nothing in the tax law turns out to be easy," add the temporary motor vehicle sales tax deduction enacted in the 2009 Recovery Act. The concept sounds simple enough: Give consumers a tax incentive to purchase new vehicles in an effort to help the ailing auto industry. Its execution, however, has left many tax advisors scratching their heads over the number of issues that have been raised in connection with this new deduction. BASIC RULES An individual is permitted to claim a deduction from gross income with respect to "qualified motor vehicle taxes." The amount of the deduction is limited to the portion of the state sales or excise tax imposed on the first $49,500 of the purchase price of the vehicle.