Surprise! Tax on 'Cash for Clunkers' Rebate

[sws4420]

The Cash For Clunkers program is adding to the activity at treasurers' offices all around South Dakota. First, people were asking for proof of ownership, so they could show they owned their vehicle for a full year, allowing them to cash it in. Now, they'll be returning to register their new vehicle. And when they do, new owners need to bring every bit of paperwork provided to them by their dealer.

"That means they need their title, their damage disclosure, their bill of sale and the dealers have 30 days to get that to them," Minnehaha County Treasurer Pam Nelson said.

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.

For now, the biggest impact of the program hasn't hit this office yet, as most of the paperwork is still in the hands of the dealers. But Nelson expects to see move activity in her office in the next month.

"I'm anxious to see what it's going to be like. I have no idea how many people we're going to see. Hopefully the dealers can process their paperwork in 30 days," Nelson said.

And that's when the line at this office will give some indication of how many cars the government program moved off of local lots.

Nelson adds that if you did recently purchase a vehicle, ensure your dealer gets you the paperwork in time because if they don't you could pay extra interest and penalties.


http://www.keloland.com/NewsDetail6162.cfm?Id=0,89084

[Dave]

I knew there had to be some sort of loop hole. How do they expect people to pay this tax when the majority of the ones that were able to utilize the CFC program don't have the means to buy a new car anyway? F'n assholes.

[LLL]

Goes back to the old adage - nothing is ever free.

I question this, though. I have used rebate dollars from my GM Mastercard at least three times over the years and no one ever said anything about those funds being taxable, so why would a "rebate" from Uncle?

[sws4420]

I think what the article is saying is that DMV is taxing them on the value of the car, not the price they paid for it, meaning that if they paid $15,500 for a $20,000 car, they have to pay the tax on $20,000.

I think.

[LLL]

I think what the article is saying is that DMV is taxing them on the value of the car, not the price they paid for it, meaning that if they paid $15,500 for a $20,000 car, they have to pay the tax on $20,000.

I think.

Oh, I see, so you already paid tax to the dealer on the $15,500, now you have to pay tax on the $4,500 when you register it? The dealer always registers for you, transfers plates, so I wonder how this all happens. Sounds screwed up. This I know. :blink:

[trojanmiro]

technically, even though you pay tax on a vehicle when you buy it, you have to claim the sale of a vehicle on your taxes....... i think. i never have, but i think you are supposed to.

i dunno, i could very well be wrong on this.

[sws4420]

Here's a log entry from some liberal douche:

Another Republican distortion of the Cash for Clunkers tax

In the newest attempt to prevent any good news from being reported and smear the Cash for Clunkers program Republican sources are now claiming a Cash for Clunkers tax exist. The argument is yet another misstatement of facts and twist of language used to try to make the Obama administration look bad. Here is the reality.

The only tax anyone will pay on the $4500 rebate they receive will be state and local taxes. Therefore the "tax" is not a "Cash for Clunkers tax" but one put on people from their state or local laws. Many people will not even pay this tax depending on their financial situation and the local laws within their state.

Conservatives may respond by saying a tax is a tax. Maybe but even if the federal government could legally prohibit state and local governments from taxing the rebates (which is doubtful) the local officials would undoubtedly complain of federal interference in such a case. Conservatives seem to be big advocates of state rights but now all the sudden they want the federal government to tell state and local governments what they can tax. This is conservative hypocrisy at its finest.

Finally, the tax which is placed on someone through state and local governments only applies to money people did not have and would not have without the Cash for Clunkers program. Effectively the tax credit given through the program is a gift from the federal government. It is not as if people are being taxed from state and local governments on their hard earned income.

If Republicans are really upset about the tax in this case they should appeal to their state and local government for an exemption. The Obama administration and federal government should not be blamed for the taxes of state and local officials on the tax credits they approve.


http://www.examiner.com/x-5738-Political-Buzz-Examiner~y2009m8d28-Another-Republican-distortion-of-the-Cash-for-Clunkers-tax