As we’ve all heard, the economic stimulus package was signed into law in February. One of the things added to the bill was a temporary provision that allows people who buy new automobiles in 2009 to deduct any state and local sales and excise taxes on that purchase from their taxable income. This would include taxes on the chassis for new handicap ramp vans, so I thought it would be helpful to outline details of the deduction here on the blog.
Details of the Sales Tax Deduction
The deduction is available to purchasers of new wheel chair vans in 2009, from January 1st to December 1st. Only the tax on the chassis is deductible, not the tax on the accessible conversion by BraunAbility.
You may deduct state and local taxes and any excise taxes charged on the chassis purchase.
The deduction is available to those earning less than $125,000 ($250,000 for joint filers).
You can deduct the sales tax on the first $49,500 of a chassis price.
This deduction is an “above-the-line” deduction, which means you can take it regardless of whether you itemize other deductions on your tax return.
A Real-World Example
Here’s a quick example of how the tax deduction would work in the real world. Let’s say you buy a new Entervan or Rampvan, and paid $30,000 for the chassis alone. If you had a trade-in of $6,000, typically states would tax the difference between the new car and the trade, which in this instance would be $24,000.
At a tax rate of 6.5%, that would mean your deduction in this case would be about $1,560. Tax rates vary by state, so of course your deduction will be based on the tax rate in your state. If you are buying the same ramp van with no trade, you would deduct even more – $1,950 at our example 6.5% tax rate.
On top of this deduction, remember that in most states the cost of the conversion itself is typically exempt from sales tax – be sure to check with your local BraunAbility dealer for details.
Is Now the Time?
If you’re like me, you’ve been wondering if this is the right time to purchase a new vehicle. This new deduction, coupled with various incentives currently offered by the car companies, make the purchase price of a new wheelchair van very attractive. Of course, only you can decide if the numbers add up for your situation. You may want to check with your accountant, and of course you can always visit your local BraunAbility Dealer to see the wheelchair vehicles they currently have in inventory.
I’d like to end with a disclaimer: I’m not an accountant – I don’t even play one on TV! Talking about taxes typically makes my head hurt. If you can add any details to this that I may have overlooked, please leave a comment below!
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*New XXXX BraunAbility XXXXXXXX. Monthly payment amount advertised is based on $XX,XXX at X.X% for XX months. All monthly payments are subject to approved credit and XX% down payment. Not all applicants will qualify. Starting MSRP excludes tax, tag, registration, title, destination/delivery charge, service contracts, and dealer fees. Monthly payment is based upon estimated selling price of the vehicle in U.S. dollars and does not include applicable cash back, rebates, and net trade-in allowance. Programs are subject to change or termination without notice and residency restrictions may apply to some programs. Consult your local BraunAbility dealer for actual price and complete details. Advertised wheelchair accessible vehicle is subject to prior sale.
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BraunAbility Reference Material Information/Usage Guide
BraunAbility is pleased to offer reference material such as manuals, instructions and other items at no charge to our customers.
Since the material is for reference only, there is some information that we would like to ensure is understood.
This material is for reference only. BraunAbility insists that you contact an authorized factory trained BraunAbility dealer to service your BraunAbility product. Please call the BraunAbility Customer Experience Group at 1-800-488-0359 to locate your nearest dealer.
Please review the “worry-free” warranty on the back cover of any BraunAbility product manual. It clearly indicates that the warranty is void if service work is performed by an unauthorized person.
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