Don’t forget to promote sales tax deduction!
The current issue of SmartMoney magazine includes an article offering tax planning tips to readers. Under the heading “Stimulus Savings,” the author wrote: “the ‘Cash for Clunkers’ program may be over but consumers can still get a break on new vehicles.” That’s true advice . . . but only half a loaf.
Regrettably, the article didn’t include the fact that boat buyers also get a break. According to MRAA’s lobbyist, Larry Innis, the tax break on boat purchases actually goes back to late 2004 when Congress included it in a stimulus bill called the “American Jobs Creation Act.” The provision allowed for the deduction of state and local sales taxes and it was slated to sunset in 2005. But, Congress has renewed it several times so it’s still current and will be through 2010.
It’s sort of an out-of-sight, out-of-mind thing. Because it’s not a hot new policy, we can easily forget this is another valuable incentive for prospects to buy now. But, it’s not getting emphasized in our sales presentations any more. In fact, I’ll guess many salesmen don’t know it still exists.
With today’s buyers driven almost exclusively by price, promoting this potential tax break to prospective buyers, especially at our upcoming boat shows, certainly fits the times. But, while calling attention to the tax break, salesmen should not dispense tax advice. As with all IRS regs, there are qualifications. So, it’s always best to tell customers to consult their tax preparer for appliance and details. Still, the fact is customers could get a tax break worth hundreds of dollars by buying a boat now.
Finally, I just got a promotional email this week from a dealer (Lakeside Marine) plugging the potential savings I could realize because of this tax deduction. Frankly, it reminded me (I’d forgotten) that this tax break still exists and it prompted this blog. In addition, the e-mail also illustrated how one dealer is aggressively using every incentive idea available to reach out to customers and prospects.
Dealer Outlook
December 17th, 2009 at 11:56 am
Norman,
Do you know if this applies to new boats only or is it applicable to brokerage and used as well? Thanks for the input
December 17th, 2009 at 12:00 pm
Is this break for New only or does it include used/brokerage also?
December 17th, 2009 at 2:13 pm
So can you tell us what the Tax break is?????
December 17th, 2009 at 4:06 pm
Sales Tax Deduction Option does not state new or used. Must be on the form. Here is the act of 2004.
http://www.irs.gov/newsroom/article/0,,id=133209,00.html
December 18th, 2009 at 12:00 pm
Is this any boat???
Why hasn’t this been highlighted previously?
It should have baan a corner stone of the failed Growboating campaign
Better late than never….
December 22nd, 2009 at 9:30 pm
How about an “IRA” ? Individual recreation account !!!!!!
Lets not forget to also sell FAMILY FUN & it is not unusual to see three generations on a boat.
December 25th, 2009 at 9:44 am
To Comrade Karl: OMG! How right you are! All the funds that we have had to pay to the “Grow Boating” funds and they never mentioned this!!???
Thanks alot NMAA! You are right on top of things, as usual!
December 25th, 2009 at 9:50 am
I meant the NMMA! Sorry NMAA.
December 1st, 2010 at 7:56 pm
I can’t posibly agree with the above post, and would like to pick up on a few of the OP’s points. Not everyone will see your point of view and though I am one of them, I do respect your right to have your view. Either way I have enjoyed reading Dealer Outlook » Blog Archive » Don’t forget to promote sales tax deduction!.