From State Rep. Mike Shirkey
Last session our office helped push an effort to change Michigan sales tax rules so that taxes on vehicle sales would be charged only on the difference between the price of a vehicle and the value of any associated trade-in. While the bill to do that died last year, like many legislative efforts it can often take several tries to get something passed, and I’m pleased to report that newly introduced HB 4234 and SB 89 have recently survived several key vote hurdles and appear to be on the way to be signed into law by the Governor.
While most of the coverage on this concept has focused on tax savings for consumers on cars where a trade-in is involved, I also wanted to draw attention to the boat component of this package due to the high number of lake communities in the 65th district. Once signed into law, the agreed upon trade-in value for titled watercraft will be excluded from the sales tax calculations on the purchase of another boat. While for cars this benefit is being phased in over the course of several years as part of a compromise to get the bills passed, the change for watercraft will have no such phase in and should go into effect relatively soon. For those who have been on the fence about whether they can afford to replace their boat, it is our hope that these laws will create a more fair tax system that also spurs additional sales and potentially more production and jobs for our state’s vehicle manufacturers.
If anyone has questions on the legislation we encourage them to call our office at (517) 373-1775.
Serving with and for you,