New York considering 5% luxury tax on expensive cars
New York Governor David Paterson needs to close a $15.4-billion budget deficit, and has proposed 88 new fees and taxes to do it. One of them is aimed at New York car buyers: a 5% tax on all cars sold for $60,000 or more. Notice the phrasing "sold for," not "MSRP of". That means if you add $8,001 in options to a $52,000 car, then you can add 5% to the final price. Intriguingly, the proposed new luxury tax on yachts doesn't happen until a buyer crosses the $200,000 mark, and not until $500,000 for planes. The bill would need to be passed by the legislature, but we can imagine that luxury car dealers in Connecticut and New Jersey are watching this one closely.
[Source: Automobiles Deluxe]
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Reader Comments (Page 1 of 4)
hoov23 5:39PM (12/18/2008)
i would hope (for the dealers' sake) this tax would be applied to anyone registering in the state, regardless of where it was purchased, like sales tax. if the tax was based on the state of purchase then that would be terribly unfair to car dealers in new york.
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Yaroukh 5:40PM (12/18/2008)
Disgusting. Do commies rule N.Y. these days?
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Flashpoint 5:51PM (12/18/2008)
I'm inclined to believe that they do. I'm a New Yorker and all I been hearing lately is threats to raise our living costs (property taxes) following the failed plans to put tolls between Manhattan and other boros - effectively taxing all drivers entering the boro.
Why tax expensive cars? Most rich guys don't buy expensive cars...they buy low cost, regular cars like Malibu and accord. If they don't like the taxes, all they'd be doing is hurting the sales of these companies. This is ridiculous.
J C 6:01PM (12/18/2008)
Commies? No . Liberal socialists .
Luke 6:13PM (12/18/2008)
"Most rich guys don't buy expensive cars...they buy low cost, regular cars like Malibu and accord.."
This statement is utterly inane. Beyond a certain point (maybe 60k is too low given loans in the past few years) rich people are the only ones who can afford expensive cars.
jeff 11:48PM (12/18/2008)
yes why do you think they took away their citizens right to bear arms
paul34 12:01AM (12/19/2008)
Jeff, its part of a larger problem where the government tries to be a big mommy to everyone... and while the enlightened few in these states suffer, the rest eat it up without a second thought and think that Big Mommy government will save them and take care of them in every way possible. The government continues because the people that the people elect are not only ignorant and naive, but poor legislators and are not aware of what it actually means to be American.
Mazda FTW! 5:44PM (12/18/2008)
All aboard the U.S.S Socialism!!!
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Artie Lange 5:45PM (12/18/2008)
I guess this guy doesn't want to get re-elected. Oh wait - no one elected him in the first place. Then again, this whole election thing is so passe; New York's going to appoint its next Senator, too.
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J C 8:03PM (12/18/2008)
Re;Senatorial appointment.
One would HOPE that a state facing such dire economic consequences would appoint a QUALIFIED SENATOR instead of another Kennedy celebrity and taxing auto dealerships out of business.
rick 5:47PM (12/18/2008)
Don't think this will affect too many on this site.Most are jealous, resentful,and angry as hell about an auto workers pay check so they sure aren't buying anything like this.
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the vegas style guy 1:24AM (12/19/2008)
Amen!
Steven 5:47PM (12/18/2008)
Oh, if it helps the deficit, great! I'll even offer to pay my dealer $60k for a Prius, so I can cure he environment AND encourage sloppy spending.
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Mobius_1 5:47PM (12/18/2008)
What? No, I ain't paying no taxes! This Lamborghini Murcielago LP640 is a damn plane!
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NoTaxesWORep 6:15PM (12/18/2008)
There's got to be a loophole around this. What about buying a rolling chassis and crated engine? Then you'd be buying parts. Dealer could do the "repairs" after the sale.
moyoi 12:59PM (12/19/2008)
thats a very good possibility!
axium 5:58PM (12/18/2008)
Im a NYC dealer and in my option this will hurt us greatly. People already shop us to death between NJ and CT.
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Nick 10:37AM (12/19/2008)
It's called arbitrage.. It only helps the economy. If you can't compete with NJ and Conn then get out of the car business... Tired of the whining. Have ever shopped online? That is called arbitrage and you are doing exactly what customers do when they shop at dealers in NJ and Conn...
dkw 6:05PM (12/18/2008)
I'm not completely opposed to a "luxury" tax on very expensive cars..... HOWEVER, I don't see how anyone would pay the extra 5% by shopping at a NY dealer, instead of going to NJ or CT to get one and save the money.
This seems like it would generate LESS tax revenue for NY, by pushing customers to dealers out of state.
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Mark 6:19PM (12/18/2008)
$60k? That's not exactly what I'd call a high threshold for a LUXURY TAX. A 550i invoices at $55k. An M3 MSRP's at $56k. They are expensive sure, but a luxury? I'd consider "luxury" as 7-series and up, especially since an Escalade MSRP's at $61k. Or you could tax me more for my S2000 since its my second car (I call that "my little bit of extravagance").
And why pick on cars? Why not pick on other things that many people would consider a luxury? Why not tax country clubs more property tax? Or tax country club dues? Or tax luxury goods like Coach, Prada, Gucci, Tag Heuer, Rolex, Omega, etc? (I would put an American company that sells luxury products on that list, but I can't think of one off the top of my head. Ralph Lauren?)
The car is the whipping boy once again...
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