It is the final weekend for the “Cash for Clunkers” program. The popular promotion will end Monday night after burning through about three billion dollars in just one month.
Don’t worry; if you missed out, Kentucky has an incentive program that includes a major tax credit for people trading in an old car for a new one. That law goes into effect September 1st and runs through August 31, 2010.
Motor Vehicle Usage Tax New Car Trade-In Allowance 2009 Special Session HB 3 Fact Sheet
Questions concerning this incentive may be referred to the Department of Revenue’s Motor Vehicle Usage Tax Section at 502 – 564 - 4455
The Motor Vehicle Usage Tax is a tax on a motor vehicle’s value when purchased and offered for registration. Receipts for this tax are deposited into the Road Fund.
The 2009 Special Session in House Bill 3 enacted a one year allowance for trade-in value to be deducted from the total consideration given in determining a new vehicle’s retail price subject to tax.
The trade-in allowance may be utilized for new vehicles purchased September 1, 2009 through August 31, 2010.
The new car trade-in allowance provision has a cap of $25 million. If the total amount of Motor Vehicle Usage Tax reduced by the trade-in allowance reaches $25 million, then the trade-in allowance will no longer be recognized.
The Department of Revenue will promulgate an Administrative Regulation that will outline how the cap will be computed and monitored. Assisting information will be placed on the Department’s Web site as it becomes available.
Is this a good bargain for consumers? Some critics point out the one time tax break means Kentuckians will actually pay higher taxes on more expensive vehicles in the years to come. What do you think?
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I see a good deal of talk from Washington about lowering taxes. I hope they do get 'em lowered enough so people can afford to pay 'em.
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