<p>State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible.
Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.
Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.
This deduction can be taken regardless of whether or not you itemize other deductions on your tax return.
Taxpayers will claim this deduction when filing their 2009 federal income tax return next year.
The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.
The deduction may not be taken on 2008 tax returns.</p>
<p>Hey thanks kleibo! Make my day!! I don’t think I knew that, and I might actually qualify. I think our new car purchase falls into the eligible category. That will be nice.</p>
<p>I haven’t researched this yet, but does anyone know what counts as “new”? I bought a 2009 model during 2009 from a dealer that had been using it as a loaner for cars in their shop. It had about 10,000 miles when I bought it, but had never been registered to anyone except the dealer.</p>
<p>Q. Does the purchase of a used car qualify for this deduction?</p>
<p>A. No. In order to take the deduction, you must be the first owner of the vehicle.</p>
<p>And I found this comment from someone:</p>
<p>“To my knowledge (and I currently work at a dealership), a car is still new if it hasn’t yet been titled. So for 2008 cars with less than 5000 miles on them which haven’t been titled yet, I believe they’d still fall under the category of “new” and you’d be eligible for the deduction.” </p>
<p>Someone else said:</p>
<p>“As far as I can tell, it applies to any new vehicle, regardless of when or where it is built. New vehicle, under the IRS definition, means original use begins with the taxpayer. That means not used by anyone else for its original intended purpose. I believe this was an issue back when they came up with “bonus” depreciation. An argument was made for dealer demo cars. They obviously have some miles on them, but have never been titled or registered. I believe, but do not have a reference handy, that original use intended to apply to the first purchaser to use it as intended. This would include demo cars, as they are still unused as intended when purchased, and never titled or registered”</p>
<p>I will continue to watch for IRS clarification and check the titling on my car, but I am inclined to go ahead and take it.</p>
I don’t think I knew that, and I might actually qualify. I think our new car purchase falls into the eligible category. That will be nice.</p>