New car tax proposed
A new $326 million tax package was proposed by a group of lawmakers that would make new cars, among other things, much more expensive. The talk of this tax is making local car dealerships nervous because any increase on them comes directly back to the consumer.
The new package would receive more than one fourth of its money from the new car sales and leases. The package would increase the sales tax on new car purchases from the normal 2 percent to 2.75 percent and would also raise the leasing tax on car leases from 1.5 percent to 2.75 percent, which would generate $92 million in new taxes.
The owner of Legacy Pontiac GMC in Eutaw Shawn Castleman said that he had heard about the tax, but he didn’t know how close it was to being passed. He also said that any new tax would be bad for the consumer.
“Just multiple .75 times a $30,000 vehicle and you’ll see the effects of this tax,” Castleman said.
Patrick Baugh also agrees that this tax will be bad for business. Baugh owns two dealerships, Baugh Ford in Demopolis and Baugh Chevrolet in Linden.
He said that what the tax really comes down to is going to be what the local counties do to help the dealers. He also said that the .75 increase to the state sales tax is across the board, so every dealer in Alabama will be affected by it.
“The big question is whether or not the county raises the county sales tax because then your looking at a five percent tax on all the new cars in Marengo County,” Baugh said.
Gov. Bob Riley is already discussing vetoing any major increases in taxes that reach his office.