Michigan residents who trade in their vehicle for a new one will get a tax break under a deal struck between lawmakers and Gov. Rick Snyder.
According to an Associated Press report, the Senate on Tuesday (Oct. 22) voted unanimously to phase out a requirement that buyers pay sales tax on the full price of a car or RV without subtracting the value of their trade-in. The House is expected to vote later in the day.
Starting in December, buyers would no longer pay the 6% sales tax on $2,000 or the value of their trade-in, whichever is less. Each year after, the value of the trade-in that would lower the tax bill would rise $500.
Michigan is among just six states to make car buyers pay sales tax on the full price without subtracting their trade-in.