Robertson bills would amend tax code
LANSING— Legislation that would boost industry while lessening the tax burden on Michigan citizens was approved by the Michigan Senate on Wednesday, said sponsor state Sen. Dave Robertson.
Senate Bill 126 would amend the Use Tax Act to exclude taxation on the trade in values of used cars and boats when the trade-in value is being applied to a new or used car or boat.
Senate Bill 127 amends the General Sales Act and creates a six-year phase in for the program. In 2012, only $2,500 is exempt and then this amount increases by $2,500 each year until 2017 when it reaches $15,000. After that, the trade-in value is uncapped.
“This is a tax break for the average person,” said Robertson, R-Grand Blanc Township. “This measure will give a boost to two of the state’s major industries while reducing the tax burden on consumers.”
For example, once fully implemented, a 5 year-old car, valued at $5,000 is traded in. The owner of the car applies the trade-in value to a new or used car valued at $25,000. Robertson’s bills would tax the $20,000 difference between the new car and trade in value of the old car.
“Michigan is currently one of only six states and the only Great Lakes state to tax trade-in values,” Robertson said. “This puts Michigan at a serious competitive disadvantage, this legislation seeks to correct that and make Michigan as competitive as possible.”
SBs 126-127 now advance to the House of Representatives for consideration.