No Sales Tax for bikes in 2009?

[Retrax]

It may have already been covered here but a friend of mine swears he just heard on the news if you purchase ANY new vehicle this year you will receive a tax credit or deduction for the amount of sales tax. He was certain this covered motorcycles. I haven't been able to tune into the news or papers lately. Anyone know if this is true? If so, is it a true tax credit (where you get a 100 percent benefit off your taxes) or a tax deduction (where you save a portion of the total sales tax paid on your tax return)? Or is it just B.S.?

I am in the market for a 2010 bike when they come out at the end of summer.

[sloxl]

From the IRS website:

"The American Recovery and Reinvestment Act of 2009 provides a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles through 2009. The deduction is available regardless of whether a taxpayer itemizes deductions on Schedule A. Purchases before Feb. 17, 2009, are not eligible for this special deduction.

The deduction is limited to the tax on up to $49,500 of the purchase price of an eligible motor vehicle. The deduction is phased out for joint filers with modified adjusted gross income between $250,000 and $260,000 and other taxpayers with modified AGI between $125,000 and $135,000.

Taxpayers who make qualifying new vehicle purchase this year can estimate their deduction with the help of IRS Publication 919, "How Do I Adjust My Withholding?" Worksheet 10, lines 10a to 10k take into account purchases above the $49,500 limit, as well as the income phase-outs."

There was talk of it being a credit at one time but that is what they came up with.

[BoomerBob]

It's not as good as it sounds. Say you spent $1000 on bike taxes. You might get back $100. From what I understand you don't have to go long form to get this.

[Retrax]

sloxl, thanks. A credit would be much better, but a deduction is better than nothing I guess

[FLSTFI Dave]

Originally Posted by BoomerBob

It's not as good as it sounds. Say you spent $1000 on bike taxes. You might get back $100. From what I understand you don't have to go long form to get this.

And depending on the state you live in this is nothing new. For example in TN, because of no income tax, but a high sales tax, we have always been able to deduct the tax paid on bikes, cars, and such.

[Retrax]

Wow, I wish we could. We can only deduct license plate renewals from cars.

[Oregon Deuce]

Thats one good thing about living in Oregon There isnt any sales tax

[Fxsts103ci]

Originally Posted by Oregon Deuce

Thats one good thing about living in Oregon There isnt any sales tax

and lots of micro brews

[AD345]

Originally Posted by sloxl

From the IRS website:

"The American Recovery and Reinvestment Act of 2009 provides a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles through 2009. The deduction is available regardless of whether a taxpayer itemizes deductions on Schedule A. Purchases before Feb. 17, 2009, are not eligible for this special deduction.

The deduction is limited to the tax on up to $49,500 of the purchase price of an eligible motor vehicle. The deduction is phased out for joint filers with modified adjusted gross income between $250,000 and $260,000 and other taxpayers with modified AGI between $125,000 and $135,000.

Taxpayers who make qualifying new vehicle purchase this year can estimate their deduction with the help of IRS Publication 919, "How Do I Adjust My Withholding?" Worksheet 10, lines 10a to 10k take into account purchases above the $49,500 limit, as well as the income phase-outs."

There was talk of it being a credit at one time but that is what they came up with.

Good grief...

y'all must have the most complicated tax system in the world.

[honorsdaddy]

Originally Posted by AD345

Good grief...

y'all must have the most complicated tax system in the world.

Yeah - we do.

[route66paul]

every time it changes it shifts more on to the working taxpayer as opposed to going to the source and taxing the corporations. They still pay taxes second hand through the salaries and wages paid to their employees, but now it takes 20 times the accountants to man the IRS.

[Cop_Stanger]

Originally Posted by route66paul

every time it changes it shifts more on to the working taxpayer as opposed to going to the source and taxing the corporations.

Since our corp tax rate is in the top 3 of the world do you think maybe it's too high already and may be responsible for corps moving offshore to lower tax rate countries? Somehow I doubt you've made that calculation.

[Electric Head]

Originally Posted by AD345

Good grief...

y'all must have the most complicated tax system in the world.

Yeh yours and ours is much more simple - just pay lots.

[Retrax]

Originally Posted by Cop_Stanger

Since our corp tax rate is in the top 3 of the world do you think maybe it's too high already and may be responsible for corps moving offshore to lower tax rate countries? Somehow I doubt you've made that calculation.

Stanger, don't you know? Corporations and "the rich" don't pay any taxes in this country!!!

[AD345]

Originally Posted by Electric Head

Yeh yours and ours is much more simple - just pay lots.

I hear ya - but I don't know if it holds true. The last 2 times I've been to the US there seemed to be no end of taxes to trip the unwary.

The irritating part for me was that (in Maine at least) none of the sales taxes are displayed. All the citizens either know what they are and do the math in their head or just wait for the final answer at the checkout.

It drove me up the wall. At least its a little simpler for me back home here - 1 tax (Good and Services Tax or GST) 1 rate - 12.5%, must be displayed by law to the extent that if it is not mentioned you are legally entitled to assume that it is already included in the displayed price.

Nice and easy for dummies like me.

PS. Plus there is no GST on vehicles, houses or food