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State Senate Approves Tax Break For People Trading-In Vehicles And Watercraft


People trading in cars, trucks, or boats could soon get a new tax break under legislation that passed the state Senate Wednesday.

But as The Michigan Public Radio Network’s Jake Neher tells us, some are worried about what it could mean for state school funding.

When you trade in a vehicle or watercraft in Michigan today, you pay sales tax on the total purchase value of the thing you’re buying. Under this measure, the trade-in value of your old car, truck, or boat would not count toward the sales tax.

The legislation got overwhelming bipartisan support in the Senate. But some lawmakers say it would leave a big hole in the state’s budget.

Bill sponsor Senator Dave Robertson says the tax cuts would be phased in, giving lawmakers enough time to find a way to address those issues.

“I think every attempt has been made to try and be accommodating to the concerns about the budget, but I think that we need a tax cut for Michigan’s citizens," he says.

According to the non-partisan Senate Fiscal Agency, the state would eventually lose more than 200 million dollars a year in revenue. Most of that would come out of funding for schools.

The measure now goes to the state House.

Jake Neher is a reporter for the Michigan Public Radio Network. He covers the State Legislature and other political events in Lansing.
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