Impact of Sales Tax on the Difference Bill – 11/18/13

Senator Dave Robertson

Michigan was one of only six states, and the only Great Lakes state, that applied its sales tax to the full sales price of a new or used car, RV or boat — even if the sale included a trade-in.  
    
It was an unfair policy that put in-state businesses at a serious competitive disadvantage to out-of-state sellers and cost Michigan consumers more in extra taxes. It was a clear example of how bad laws can negatively impact real people.

Thankfully, years of hard work have resulted in a new law that will positively impact the state economy, Michigan consumers and local dealers.

This reform will give buyers significant tax relief for the value of their trade-in. For example, once fully implemented, if a car valued at $5,000 is traded in and the owner applies the trade-in value toward the purchase of a $25,000 car, the sales tax would only be applied to the $20,000 difference. This is a savings of $300 for the consumer.