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. Thats true advice . . . but only half a loaf.
Regrettably, the article didnt include the fact that boat buyers also get a break. According to MRAAs 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 its still current and will be through 2010.
Its sort of an out-of-sight, out-of-mind thing. Because its not a hot new policy, we can easily forget this is another valuable incentive for prospects to buy now. But, its not getting emphasized in our sales presentations any more. In fact, Ill guess many salesmen dont know it still exists.
With todays 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, its 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 (Id 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.