Friday, March 30, 2007

Bill Would Double Current Tax On Purchase Of New Vehicles

North Carolina consumers would have to pay more than double the current tax on the purchase of a new car or truck under a tax increase proposal introduced in the state senate last week. State Senator Dan Clodfelter (D-Charlotte) has introduced Senate Bill 1201, which would raise the Highway Use Tax on new vehicles purchased from 3 percent to 6.75 percent. If passed, the tax would raise approximately $900 million annually for the Highway Trust Fund. For the average consumer purchasing a vehicle, the tax would amount to an additional $20 for their monthly car payment, and represents the single largest tax increase on cars and trucks in state history. In addition, the bill would do away with trade-in deductions, meaning car buyers would pay the full 6.75 percent tax on the price of the new vehicle, even if they had a trade in. The bill already has a lot of opposition. Car dealers said the proposed tax hike would hurt working class people, even preventing some consumers from being able to afford buying a car.

Photo: Roger Wood, Internet Sales Manager, at Smithfield Chevrolet stands in front of a new 2007 Chevy Silverado. If a new bill, introduced by NC Senator Dan Clodfelter (D-Charlotte), is approved it would increase the tax on new cars and trucks from 3 to 6.75%. Car dealers are opposed to the tax increase


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