Chamber-Supported Tax Break for Car and RV Buyers Accelerated

June 5, 2017

Those who trade in an old car or recreation vehicle for a new one will pay less sales tax under four bills being taken up in the House Tax Policy Committee and supported by the Michigan Chamber. Michigan is only one of a few states that does not recognize the value of a trade-in when calculating sales tax owed.

Several years ago, the legislature enacted legislation that would save consumers tens of millions of dollars when purchasing a new vehicle. This savings is realized by applying the value of a trade-in vehicle against a new vehicle and only paying sales tax on the difference. So, a trade-in value of $5,000 used against the purchase of a $15,000 vehicle will result in sales tax only being charged on $10,000. This savings was to be phased in over a period of time that exceeded 20 years. However, under the bills being taken up, this phase in will be shortened to 10 years.

The Michigan Chamber is urging members of the legislature to accelerate this tax break as quickly as possible. 

For more information please contact Dan Papineau at