Archive for Policy

'Cash for Clunkers' possibly suspended

The federal government might discontinue its popular Car Allowance Rebate System (CARS) program, known also as Cash for Clunkers.  The program provides a credit for owners of older gas guzzlers to purchase newer, more fuel-efficient vehicles.

But the program has proved so popular,  that it may be at risk of depleting its $1 billion allotment more quickly than anticipated.

Transportation Department officials called lawmakers earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and they were reviewing their options to keep the program funded.

White House press secretary Robert Gibbs said they were working to “assess the situation facing what is obviously an incredibly popular program. Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored.”

Dubbed the Car Allowance Rebate System, or CARS, the program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.

The program was scheduled to last through Nov. 1 or until the money ran out, but few predicted it would be depleted in days. Through late Wednesday, 22,782 vehicles had been purchased through CARS and nearly $96 million had been spent.

But dealers raised concerns about large backlogs in the processing of the deals in the government system. A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet been approved by the government, or nearly 13 trades per store.

It suggested that with about 23,000 dealers taking part in the program, car dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.

Previously, LDR distributed guidance on how Louisiana sales tax law applies to the CARS program.

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Revenue Information Bulletin 09-018: 'Federal Cash for Clunkers Program'

Revenue Information Bulletin No. 09-018
July 28, 2009
Sales Tax

Computation of the State Sales Tax on Vehicle Transactions under the Federal “Cash for Clunkers” Program

On June 24, 2009 President Obama signed into law the Consumer Assistance to Recycle and Save (CARS) Act of 2009. This act establishes the “Cash for Clunkers” program, under which the United States Government will provide $3,500 or $4,500 to offset the purchase or lease price of a more fuel efficient vehicle upon the trade-in of an eligible vehicle.

The program requires that, in order for consumers to receive the monetary credit toward the purchase or lease of eligible new fuel-efficient vehicles, they must surrender their old, less fuel-efficient vehicles. The payments to consumers on vehicle purchases under this program will be treated as dealer allowances for vehicle trade-ins on the purchase of new vehicles and are not subject to the state sales tax.

An example is as follows:

 

 Sales Price of Vehicle

 

 $25,000

 

 Less: Federal Program Payment

 

 4,500

 

 Amount Subject to State Sales Tax

 

 $20,500

Under the state sales tax law, qualified vehicle lessors who acquire vehicles for leasing under this program will not be required to pay sales taxes on their acquisitions of the vehicles. The federal payments that are applied to consumer leases as capitalized cost reductions will be considered as taxable “gross proceeds” from leasing and renting.

Questions concerning this matter can be directed to the Department of Revenue’s Taxpayer Services Division at 225.219.7356.

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RIB 09-017-A: Annual Sales Tax Holiday FAQs

The Policy Services Division of the Louisiana Department of Revenue (LDR) has issued a Revenue Information Bulletin (RIB) concerning the annual two-day state sales tax holiday that will be conducted on August 7-8, 2009.

Revenue Information Bulletin No. 09-017-A presents answers to frequently-asked questions that LDR has received regarding the sales tax holiday.


A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or on the Louisiana Department of Revenue.

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RIB 09-017: Annual State Sales Tax Holiday Scheduled Friday, August 7, and Saturday, August 8, 2009

The Policy Services Division of the Louisiana Department of Revenue has issued a Revenue Information Bulletin (RIB) concerning the annual two-day state sales tax holiday that will be conducted on August 7-8, 2009.

Revenue Information Bulletin No. 09-017 discusses the purchases that are eligible for state sales tax exemption during the holiday, the purchases that are not eligible, as well as the conditions and special provisions related to the holiday.


A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101(D). A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or on the Louisiana Department of Revenue.

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2009 Louisiana Sales Tax Holiday – August 7 & 8

The annual Louisiana Sales Tax Holiday provides an exemption from state sales tax on the first $2,500 of the purchase price of most individual items of tangible personal property for non-business use. The state sales tax is payable on the portion of the purchase price of any individual item in excess of $2,500.

The holiday will apply to the four-percent state sales tax, but will not apply to sales taxes levied by parishes, municipalities, school boards, and other political subdivisions of the state.

The 2009 Louisiana Sales Tax Holiday will be from 12:01 a.m. on Friday, August 7, through 12 midnight on Saturday, August 8. These dates are set by the enabling legislation as the first consecutive Friday and Saturday of August annually.

For more information, visit the 2009 Louisiana Sales Tax Holiday FAQ page at revenue.louisiana.gov.

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Louisiana Tax Amnesty Program – FAQs

The LDR website now hosts a list of Frequently Asked Questions about the Louisiana Tax Delinquency Amnesty Act of 2009.

The FAQ page also includes a link to the official page for House Bill 720, the legislation creating the tax amnesty program, on the homepage of the Louisiana House of Representatives. Here you can read the current text of the legislation, as well as track its legislative history.

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