Gov. Rick Snyder is expected to sign a bill that provides a tax break for Michigan consumers who trade in a used vehicle or watercraft when buying a new car, truck, or boat.
Currently, Michigan is just one of six states that taxes the value of the entire purchase of a new vehicle or boat, regardless of the value of a trade-in. The new measure will only tax the purchase of the new vehicle or boat after the value of the trade-in has been subtracted.
“This solution replaces an outdated system of having consumers being unfairly taxed twice for the same vehicle,” Snyder says. “This change — passed with strong bipartisan support — brings Michigan in line with the vast majority of states. It’s another example of how we can make Michigan’s tax structure fairer while fueling our continued comeback.”
The legislation exempts the value of a trade-in from the sales and use taxes on new and used motorboats starting Nov. 15. Vehicles will have a phase out process that starts Dec. 15.
“This plan strikes a smart, fiscally responsible balance,” Snyder says. “The amount saved would be phased in gradually, offering families some immediate tax relief while spreading out the impact on the state budget.”
In April 2011, following up on a campaign promise, Snyder formed the Office of Regulatory Reinvention (ORR) in a bid to reduce the number of administrative rules in the state. Since that time, some 1,500 rules and regulations have been modified or eliminated.
The overall goal of the ORR is to offer a regulatory climate that is simple, fair, efficient, transparent, and supportive of business growth and job creation. At the beginning of the ORR’s review, Michigan had 19,227 administrative rules. Today, Michigan has less than 18,000 administrative rules. The ORR is a part of the Department of Licensing and Regulatory Affairs, or LARA.