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2013 Senate Bill 89: Vehicle trade-in “sales tax on the difference” only

Public Act 160 of 2013

Introduced by Sen. David Robertson (R) on January 29, 2013 To exempt from sales tax the value of a trade-in when buying a motor vehicle or titled watercraft. The buyer would only pay sales tax on the difference between the value of the trade-in and the purchase price of the replacement vehicle. The tax break would be phased in gradually through 2019.   Official Text and Analysis.
Referred to the Senate Finance Committee on January 29, 2013
Reported in the Senate on February 5, 2013 With the recommendation that the substitute (S-1) be adopted and that the bill then pass.
Substitute offered in the Senate on February 5, 2013 To adopt a version that phases in the tax break over a longer period.
The substitute passed by voice vote in the Senate on February 5, 2013
Amendment offered by Sen. Randy Richardville (R) on February 6, 2013 To move back the bill's effective date to Oct. 1, 2013.
The amendment passed by voice vote in the Senate on February 6, 2013
Amendment offered by Sen. Jack Brandenburg (R) on February 6, 2013 To move forward the effective date of the tax break for watercraft purchases.
The amendment passed by voice vote in the Senate on February 6, 2013
Passed 34 to 2 in the Senate on February 6, 2013 To exempt from sales tax the value of a trade-in when buying a new motor vehicle, titled watercraft or recreational vehicle. The buyer would only pay sales tax on the difference between the value of the trade-in and the purchase price of the new car. The tax break would be phased in gradually through 2021, when its value would reach $226 million.
Received in the House on February 6, 2013
Referred to the House Tax Policy Committee on February 6, 2013
Reported in the House on May 29, 2013 Without amendment and with the recommendation that the bill pass.
Substitute offered by Rep. Andrea LaFontaine (R) on October 22, 2013 To adopt a version of the bill that phases in the tax break over 24 years, but suspend this if the phase-in if the federal health care law's ("Obamacare") Medicaid expansion (authorized by House Bill 4714) is rescinded.
The substitute passed by voice vote in the House on October 22, 2013
Amendment offered in the House on October 22, 2013 To begin phasing in the auto tax break in December rather than November.
The amendment passed by voice vote in the House on October 22, 2013
Amendment offered by Rep. Jon Switalski (D) on October 22, 2013 To use general tax revenue to reimburse the amount that the tax break reduces sales tax revenue otherwise earmarked to the school aid fund.
The amendment failed by voice vote in the House on October 22, 2013
Passed 99 to 9 in the House on October 22, 2013 To exempt from sales tax the value of a trade-in when buying a new motor vehicle, titled watercraft or recreational vehicle, but phase this tax break in over 24 years. The phase-in would be suspended if the federal health care law's ("Obamacare") Medicaid expansion (authorized by House Bill 4714) is rescinded, but legal experts are divided over whether this would be allowed.
The buyer would only pay sales tax on the difference between the value of the trade-in and the purchase price of the new car. Initially, the tax break would only apply to $2,000 of the price difference, and this would increase $500 per year. When fully implemented the tax break's value would reach $226 million (in 2013 dollars).
Received in the Senate on October 23, 2013
Passed 38 to 0 in the Senate on October 23, 2013 To concur with the House-passed version of the bill, which would phase the tax break in over 24 years, but suspend that this if the federal health care law's ("Obamacare") Medicaid expansion (authorized by House Bill 4714) is rescinded.
Signed by Gov. Rick Snyder on November 6, 2013

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