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Florida Dealers Mixed on Impact of Tax Break

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March 18, 2009 by   Leave a Comment

The new federal stimulus package includes tax incentives for buyers of new motorhomes and motorcycles.

But, according to a report in the Orlando Business Journal, Central Florida dealers have mixed opinions on how much it will help sales.

Under the package, buyers of those types of vehicles, as with those of new cars and pickups, will be able to deduct the sales tax they pay, a benefit designed to get people back into the shopping mode – thereby helping businesses.

At Flagship RV in Clermont, that would mean a savings of about $2,450 on an average RV sale of $40,000. But while area dealers generally like that part of the package, some aren’t sure it will make a difference.

“Right now, anything would be a blessing, but I don’t think it will have much of an impact until the economy turns around and banks start lending again,” said Gary Flagg, president of Flagg Enterprises, which owns Flagship RV where sales are down by 40%. He used to sell 700-plus RVs annually, but that’s fallen to 430 units.

As he sees it, the banks are the problem.

“The money is not trickling through the system – we’re getting no cooperation from lending institutions,” Flagg said, noting he has heard from plenty of potential buyers who simply can’t get financing.

Paris McNamara, business manager for Giant Recreation World, is also an enthusiastic backer of the stimulus incentive. She said the combination of the sales tax deduction as well as interest deductions on RVs – because many qualify as second homes – should get more people into the showroom. “We believe it will spur business.”

Pete Giarrusso, owner of Pete G’s Chopper Design Services, believes the tax deduction could tip the undecided in his favor.

“A lot of people are sitting on the fence, and this could be huge if they can discount the sales tax,” he said. “A customer doesn’t care where the discount comes from as long as he gets one.”

Such an incentive couldn’t come at a better time for Giarrusso. Revenue dropped from $1.8 million in 2007 to $1.4 million in 2008, with almost the entire decline attributed to slowing new motorcycle sales.

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