LANSING (WILX)-- If a new car is on your wish list this year, you might want to wait a little while. Governor Snyder is just a signature away from giving Michiganders a tax break for your vehicle trade-in.
It's great news for drivers, but not everybody's happy about it.
Currently when you trade in a vehicle to buy a new car you get stuck paying sales tax on the sticker price, not the actual price with the trade-in deducted. Michigan is one of only a few states that allows it.
But in an effort to save customers money, lawmakers overwhelmingly voted to phase out the extra charge Tuesday.
Starting soon, trading in a used car will give buyers up to a two-thousand dollar tax break. Every year after, the incentive will increase five-hundred dollars.
"Everyone can agree they don't want to pay more taxes than they have to," said Jim Kyton III, Sales Manager at Spartan Toyota
Right now Kyton has to compete with states that already have the tax break. He says he sometimes even encourages customers that have homes in other states to register their vehicles elsewhere to save more money.
Between the House and the Senate it's not just cars that will be considered in the tax break, it's RV's and boats as well.
Customers will be saving, but the state will be losing millions of dollars as a result.
"How are you going to pay for it? Even with a phase out the financial impact is greater and greater every year, and it has to be paid for," said Rep. Andy Schor. (D-LANSING) Schor was one of the few in the House that voted against the bill.
Right now lawmakers have nothing in place to make up for the loss. But those who voted for the tax break believe the slow increase will ensure the state won't suffer a significant impact,
"There's some tax money that won't be coming in, but if auto sales go up it could be a wash," said Sen. Rick Jones (R-GRAND LEDGE).
But there's no guarantees that'll happen.
We'll let you know when the legislation goes into effect.