New Michigan Sales Tax Exemption for Vehicle and Watercraft Purchases with Trade-Ins

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(PRWEB) January 14, 2014

Michigan consumers will no longer be taxed on the full purchase price of new or used motor vehicles, recreational vehicles, or titled watercraft when a consumer provides a trade-in towards a purchase.

Starting December 15, 2013, Public Act 160 phases in an exemption from sales tax on the agreed upon value of a trade-in on the purchase of a new or used motor or recreational vehicle. The "agreed-upon value" of a trade-in must be stated on the invoice given to the purchaser. The exemption that is not subject to sales tax is currently limited to the lesser of the agreed-upon value or $2,000. Starting January 1, 2015, and each January 1 thereafter, the exemption is increased by an additional $500 per year. In the year in which the exemption exceeds $14,000 and each January 1 thereafter, the full amount of the agreed-upon value is exempt from sales tax.

As of November 15, 2013, the agreed-upon value of a titled watercraft will be exempted from sales tax when used as part payment of the purchase price of a new or used titled watercraft if the agreed-upon value is separately stated on the invoice.

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UHY Advisors provides tax and consulting services to a variety of sectors. UHY LLP, a licensed CPA firm, provides audit and other attest services to public and private companies. UHY Advisors FLVS provides forensic, valuation, intellectual property, electronic discovery and international arbitration services to law firms and their clients. Many of these services grew from client business needs and their requests for assistance in a variety of areas of expertise.

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