LANSING – State Representative Terry Brown (D-Pigeon) today announced a plan to give new-car buyers a break on sales tax when they trade in a vehicle, which will give consumers an incentive to buy new vehicles. Brown has introduced the bill in the state House.
"The auto industry is a cornerstone of our local economy and Michigan's economy, and we have to do everything we can to keep it alive," Brown said. "This plan will encourage consumers who have been considering buying a new vehicle to go ahead and make that purchase. These sales, in turn, will boost all the local and statewide businesses that support the auto industry, including parts makers and suppliers."
Hundreds of thousands of Michigan residents rely on the auto industry for their livelihoods, including thousands who work at auto parts makers and suppliers in the Thumb.
The tax break works like this:
Normally when you buy a car, say for $20,000, and you have a trade-in for $5,000, you still pay sales tax on $20,000. Under Brown's proposal, the buyer would pay sales tax on $15,000 instead, a savings of about $300.
"When you buy a new car, you are protecting jobs," Brown said. "You're supporting the men and women who make parts for the vehicles, those who put them together on the assembly line, those who work at the dealerships, and more. New vehicle sales put food on the tables of families all across Michigan. We must do everything we can to keep these hard-working residents employed."