Michigan residents could see tax breaks for trade-ins
- Thread starter eao
- Start date
polarisrider1
New member
what if you sell to Joe Blow and not trade it in?
No trade-in nothing changes, you pay on negotiated price of vehicle before factory rebates. Would only affect purchases with trade-ins.
Now if you negotiate $60,000 (not sticker) on a new truck and trade in a $30,000 truck you pay sales taxes on $60,000 (6%=$3,600). If the law passes you pay sales tax on the difference of $30,000 ($60,00-$30,000 (trade-in) =$1,800). The state of Michigan loses $1,800 and you save $1,800.
Note-Rebates do not count as they are considered your money and cannot be used to reduce taxes.
Now if you negotiate $60,000 (not sticker) on a new truck and trade in a $30,000 truck you pay sales taxes on $60,000 (6%=$3,600). If the law passes you pay sales tax on the difference of $30,000 ($60,00-$30,000 (trade-in) =$1,800). The state of Michigan loses $1,800 and you save $1,800.
Note-Rebates do not count as they are considered your money and cannot be used to reduce taxes.
wow I also assumed that was the way it worked in all states.
why in the world would u trade in and get bent over from the dealer if not for the tax credit at trade in.
works that way in MN for sleds quads bikes pretty much anything U can trade in.
the next guy still has to pay tax on your used trade in for what the toy cost him .
why in the world would u trade in and get bent over from the dealer if not for the tax credit at trade in.
works that way in MN for sleds quads bikes pretty much anything U can trade in.
the next guy still has to pay tax on your used trade in for what the toy cost him .
anonomoose
New member
Right now, in Michigan, as stated you pay tax on the full boot each time you buy regardless of what you trade or what you got for the trade. Most other states didn't do this and give the dealer the advantage of sort of discounting the process by taking the trade price away from the sales price and then you pay tax on only the difference.
This was law got enacted at a time Michigan moved from property taxation to sales tax 4 per cent to 6 per cent. What they didn't think about is all the cheating going on out there where "hey buddy, I know I paid 4k for a sled but let's do a side agreement saying that I paid 1k for the sled and I will avoid tax on the sale...." arrangements. Now we are talking about some serious cash to the state. If the deal goes thru a dealer that isn't likely to happen.
State then collects more cash than the other way.
This gives the dealer a good channel to do more business so that customers can save a few bucks.
Paying tax on the darn thing twice is not unusual but here is one correction to that law that should have been made to align with other states right from the get go.
This was law got enacted at a time Michigan moved from property taxation to sales tax 4 per cent to 6 per cent. What they didn't think about is all the cheating going on out there where "hey buddy, I know I paid 4k for a sled but let's do a side agreement saying that I paid 1k for the sled and I will avoid tax on the sale...." arrangements. Now we are talking about some serious cash to the state. If the deal goes thru a dealer that isn't likely to happen.
State then collects more cash than the other way.
This gives the dealer a good channel to do more business so that customers can save a few bucks.
Paying tax on the darn thing twice is not unusual but here is one correction to that law that should have been made to align with other states right from the get go.
Sounds like they made a deal of some kind.............
http://www.woodtv.com/news/michigan/michigan-vehicle-buyers-may-get-a-tax-break_67618936
http://www.woodtv.com/news/michigan/michigan-vehicle-buyers-may-get-a-tax-break_67618936
mezz
Well-known member
Doesn't sound like much of a deal at all, per the article, "Starting in December, buyers will 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." Can anybody explain this?????? 
-Mezz
-MezzDoesn't sound like much of a deal at all, per the article, "Starting in December, buyers will 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." Can anybody explain this??????
It means they are phasing the tax change in verrrry slowly. Say if your trade-in is worth $15000, then you'll have to wait 26 years before trading in to get the full benefit on the total value of the vehicle.
Said another way, this is a $120 tax break for a trade in taking place the first year, $150 the next, $180 the next after that, etc.
anonomoose
New member
The tax break will start at the first 2k of your trade then the next year 2500 and the year after 3k and so on.
If you trade in a 12k truck you won't receive much of a tax break and it will take a dozen years to get up to numbers that would really be a benefit to the average joe.
This was a cop-out by the legislature who should have just removed it by 20% each year and then 100% by year 5....just to equal what they already do in other surrounding states.
If you trade in a 12k truck you won't receive much of a tax break and it will take a dozen years to get up to numbers that would really be a benefit to the average joe.
This was a cop-out by the legislature who should have just removed it by 20% each year and then 100% by year 5....just to equal what they already do in other surrounding states.
What a bunch of crap. How do you folks put up with it? How many people buy in the neighboring states and then register the vehicle in that state at a relatives address? Then maybe next time the plates are do, re register in MI.
No wonder MI is going broke.
I Wisconsin when you first register a used sled in your name you pay sales tax and as far as Minnesota, unless they changed, you also pay tax when you register a used sled in your name. If you trade in you pay on the difference. If you buy from a private party you pay on the whole price.
I bought a new unregistered sled in Minnesota and paid the tax in Minnesota and when I got back to Wisconsin, I didn't pay any tax since I had paid it in Minnesota because it was a higher rate in MN.
No wonder MI is going broke.
I Wisconsin when you first register a used sled in your name you pay sales tax and as far as Minnesota, unless they changed, you also pay tax when you register a used sled in your name. If you trade in you pay on the difference. If you buy from a private party you pay on the whole price.
I bought a new unregistered sled in Minnesota and paid the tax in Minnesota and when I got back to Wisconsin, I didn't pay any tax since I had paid it in Minnesota because it was a higher rate in MN.
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In MN you buy a sled from a dealer new or used you pay tax on the full price.
If you trade a sled in to a dealer you pay tax on the difference.
If you buy a sled from a private owner there is no tax.
This also applies to ATV's and boats. You pay tax on all trailers private or dealer.
If you trade a sled in to a dealer you pay tax on the difference.
If you buy a sled from a private owner there is no tax.
This also applies to ATV's and boats. You pay tax on all trailers private or dealer.
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anonomoose
New member
Indy for Congress!