Michigan Senate votes to cut tax on car, boat sales by calculating value of trade-in vehicles

Michigan among 6 states that don't allow a trade-in allowance against sales tax applied to sales of cars, boats and recreational vehicles

Published On: Feb 06 2013 11:59:29 AM EST
LANSING, Mich. -

The Michigan Senate has voted to cut the tax people pay when they trade in an old car and buy a new or used one.

Michigan is among six states that don't allow a trade-in allowance against the sales tax applied to sales of cars, boats and recreational vehicles. That would change under bills approved overwhelmingly Wednesday and sent to the House.

The measure would apply the trade-in value of a car to the calculation of the 6 percent sales tax when a new vehicle is bought. The break would be phased in over 10 years to alleviate concerns about the corresponding drop in tax revenue.

Both Democrats and Republicans have gotten behind similar proposals in recent years, but they have stalled over concerns about the effect on the budget.

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