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

Public Act 160 of 2013

  1. 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.
    • 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.
  2. 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.
    Who Voted "Yes" and Who Voted "No"

  3. 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if the phase-in if the federal health care law's ("Obamacare") Medicaid expansion (authorized by House Bill 4714) is rescinded.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.
  4. 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).
    Who Voted "Yes" and Who Voted "No"

  5. Received in the Senate on October 23, 2013.
  6. 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.
    Who Voted "Yes" and Who Voted "No"

  7. Signed by Gov. Rick Snyder on November 6, 2013.

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