Senate Approves Auto-Loan Interest and Sales-Tax Writeoff
By Bill Visnic February 4, 2009By Bill Visnic
WASHINGTON, D.C. -- Perfectly timed after auto makers reported dismal U.S. sales in January, legislation introduced by U.S. Senator Barbara A. Mikulski's (D-Md.) to allow buyers to deduct from their income taxes the interest payments on auto loans - as well as state sales and excise taxes -- was passed in the Senate late yesterday.
The Auto Assistance Ownership Amendment is an amendment to the American Recovery and Reinvestment Act, which is awaiting Congressional approval.
Many analysts and auto-industry executives have called for auto-loan interest tax writeoffs to be a part of the broad federal stimulus being considered in Washington as an effective way to help reignite auto sales this year.
The Auto Assistance Ownership Amendment makes interest payments on car loans and state sales or excise car tax-deductible for new cars purchased between November 12, 2008 and December 31, 2009, said a statement from Sen. Mikulski's office.
The senator's office says a family in Maryland purchasing a $35,000 vehicle would save a total of about $2,500 -- $588 rebated from Maryland's excise tax and about $1,912 in deducted loan interest. The deductions are "above the line," making them available for all tax filers regardless of whether or not they itemize.
Purchasers of a $25,000 vehicle would save a total of about $1,553.
There are limits: Families cannot make more than $250,000 and the income limit for individuals is $125,000. And the deduction cuts out at a vehicle purchase price limit of $49,500.
"Today the Senate voted 'yes' to getting our economy rolling again," Senator Mikulski said.
"President Obama said the goal for the economic recovery program is to create jobs and save jobs. That's exactly what my amendment does. It's targeted at saving American jobs and helping families buy the cars they need to get to work and take their kids to school. Our economy is teetering, and Congress must take swift action to save jobs and lend a helping hand to struggling families. That's what we did here today."
PHOTO: Maryland Senator Barbara Mikulski
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