PORSCHE OF NASHUA

The American Recovery and Reinvestment Act of 2009 which is expected to be signed into law today, February 19 contains a provision permitting federal deductibility of motor vehicle sales and excise taxes on new vehicle sales occurring between the date of enactment and the end of 2009. 

The federal deduction is available to customers with a "modified adjusted gross income" of less than $125,000 for individuals and less than $250,000 for joint filers.  The deduction will be "above the line", meaning that it is available regardless of whether the customer itemizes deductions.  The deduction is only available on purchases of NEW vehicles under 8,500 pounds gross vehicle weight regardless of model year, provided the original use starts with the taxpayer claiming the deduction.  Vehicles sold for under $49,500 qualify for the full deduction.  Tax on the first $49,500 of any vehicle sold above that price may also be deducted.