Motorcycle Tax Deductions in Stimulus Package

[rgury]

http://thekneeslider.com/archives/2009/02/18/motorcycle-tax-deductions-in-stimulus-package/

[swampduc]

My reading of that, and more importantly, my accountant's, is that the sales tax on new vehicle purchases is deductible.

[NWapex]

No sales tax in Oregon 

[Raux]

WOW that is a BIG bike
 
"a motorcycle the gross vehicle weight rating of which is not more than 8,500 pounds"

[Desmo Demon]

Yeah, I found that a bit humorous......Go out and buy something like a $10,000 bike and deduct the sales tax.....Hmmmm....in South Carolina, there is a $300 tax limit, so deduct $300, look in the tax tables, and I get something like $30 more back on my taxes to wind up $10,000 further in debt. Just doesn't seem like a hell of a lot of incentive to me.   

[ducatiz]

All sales tax is deductible on your fed forms.  If your state has an income tax, you may deduct EITHER the income tax OR the sales tax you paid in that state.

This has always been the law.

http://www.irs.gov/individuals/article/0,,id=152421,00.html

You can either get receipts for EVERYTHING you buy subject to sales tax and keep them to add up at the end of the year, or you can use the IRS's calculator (above) to estimate and just add in the big ticket items you bought.

[swampduc]

All sales tax is deductible on your fed forms.  If your state has an income tax, you may deduct EITHER the income tax OR the sales tax you paid in that state.

This has always been the law.

http://www.irs.gov/individuals/article/0,,id=152421,00.html

You can either get receipts for EVERYTHING you buy subject to sales tax and keep them to add up at the end of the year, or you can use the IRS's calculator (above) to estimate and just add in the big ticket items you bought.

Yeah, in my case, Louisiana has a state income tax of 6%, so I deduct that regardless of sales tax. No real incentive to buy another bike here. Only helps if you're getting one anyway.

[ducatiz]

Yeah, in my case, Louisiana has a state income tax of 6%, so I deduct that regardless of sales tax. No real incentive to buy another bike here. Only helps if you're getting one anyway.

i wonder if the deduction allowance applies regardless if you claim income vs sales tax?  it might be that they are allowing the deduction of sales tax for a bike purchase even if you claim the state income tax only.  taht would be a nice bing -- and yes, if you are buying a bike already.

and is it a deduction or a credit?

[NWapex]

I just read the quick blurb with some of the language - it appears there is a income limitation as well.  I am guessing that may affect a higher proportion of Ducati purchasers.  It still ruffles my feathers any time I read about these type of limitations....because I work 60-70 hours a week, I should then be penalized for my earnings.  Don't get me started.

[Bick]

WOW that is a BIG bike
 
"a motorcycle the gross vehicle weight rating of which is not more than 8,500 pounds"

I guess Harley's aren't eligible. 

An extra $500-$1000 (effectively $300-$700) back in the pockets of a few people will help a little...  I guess. 

[derby]

I just read the quick blurb with some of the language - it appears there is a income limitation as well.  I am guessing that may affect a higher proportion of Ducati purchasers.  It still ruffles my feathers any time I read about these type of limitations....because I work 60-70 hours a week, I should then be penalized for my earnings.  Don't get me started.

the limit is 125k/250k of taxable income for singles/couples. if you're making that much money, i'm sure you're already well-covered on deductions and another $300 probably isn't going to break you.

[derby]

An extra $500-$1000 (effectively $300-$700) back in the pockets of a few people will help a little...  I guess. 

i view incentive more as an attempt to keep the motorcycle and rv industries afloat rather than a way to line customers' pockets.

[Raux]

i think people are missing the important part here... MORE MONEY FOR MODS 

[ducatiz]

i view incentive more as an attempt to keep the motorcycle and rv industries afloat rather than a way to line customers' pockets.

good point

unless of course the bike is >8500 GVWR

[swampduc]

i wonder if the deduction allowance applies regardless if you claim income vs sales tax?  it might be that they are allowing the deduction of sales tax for a bike purchase even if you claim the state income tax only.  taht would be a nice bing -- and yes, if you are buying a bike already.

and is it a deduction or a credit?

According to my accountant, it's a deduction, and you can take it even if you claim state inc. tax already. But yeah, only applies to certain income levels. Not a big deal in terms of the amount anyway.