LEXINGTON, KY - With representatives of local car dealers at his side, Gov. Steve Beshear signed a ceremonial copy of House Bill 3 extending the same tax credit buyers of used cars have had for years to purchasers of new vehicles around the commonwealth.
Effective for a one year "trial run" on September 1, buyers of any new vehicle in Kentucky will have to pay taxes only on the difference between the purchase price of their new car and the amount given for their trade-in, rather than paying taxes on the entire purchase price.
"It will be a spark for both the industry and for Kentucky's overall economy," Beshear said at an event in the new Bill Collins' Ford showroom at Brannon Crossing. "Not only will it help families looking to buy a car but it also will help families whose livelihoods depend on making and selling that car. I'm talking not only about those who make the Fords in Louisville, who make the Corvettes in Bowling Green, who make Toyotas in Georgetown, but those who supply the parts, those who truck the parts, those who service and sell the final production."
The state tax credit - which will be capped if $25 million in total tax breaks is reached by August 31, 2010 - comes at a time when a $3,500-$4,500 federal tax credit is also going into effect for people who trade in cars that are significantly less fuel efficient than the new ones they are buying or leasing.
The car dealers on hand at the Friday morning event were eager to see new legislation go into effect to couple with the "Cash for Clunkers," federal credit.
"This gives Kentucky automobile dealers an even playing field with dealers in other states, many of them who already have this tax credit in place," said Chuck Coldiron, president of the Somerset Automotive Group and representative of the Vehicle Motor Commission, about HB3. "We expect a snowball affect to occur, more people will be able to buy new cars, that means Kentucky's manufactures and parts suppliers will crank up the assembly lines to meet the new demand for them."