Senate Passes Amendment to Stimulus, Giving Tax Breaks on Car Loans - aftermarketNews

Senate Passes Amendment to Stimulus, Giving Tax Breaks on Car Loans

The amendment was approved by unanimous consent after the Senate voted 71-26 to waive pay-as-you-go budget rules.

From AAIA Capital Report

Sen. Barbara Mikulski (D-MD), on Feb. 3 succeeded in having an amendment added to the Senate’s Economic Stimulus Bill to provide $11 billion in incentives to consumers to spur purchases of new cars.

Mikulski’s amendment would provide an above-the-line tax deduction for all interest and state sales and excise taxes paid for new cars purchased after Nov. 12, 2008 and before Jan. 1, 2010. The amendment was approved by unanimous consent after the Senate voted 71-26 to waive pay-as-you-go budget rules.

"I want to stimulate demand in the automobile industry so that people go to showrooms and buy cars… if you buy a car, someone’s got to make them, someone’s got to sell them, someone has to service them and someone has to provide administrative services. So this amendment is good for the manufacturers, the dealers, the suppliers and the consumers," Mikulski said.

The amendment would apply the deduction to any new passenger car, minivan or light truck purchased for less than $49,500. The plan is targeted so only families that are earning less than $250,000 a year, or individuals earning less than $125,000 annually, will qualify for the full deduction. The senator estimated that a family would save about $1,500 on a $25,000 car, excluding any additional incentives offered by the dealer.

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