You might be wondering if your company vehicle qualifies for a very popular program called “Cash for Clunkers”. First, it’s important that you know a little about the program.
In July 2009, Congress passed the Car Allowance Rebate System bill and applied a supplementary $2 billion in August 2009. The bill permits persons to trace in their clunkers (vehicles that gives the owner minimal fuel mileage) for vehicles that gives a person better fuel mileage and obtain a $3,500 to $4,500 credit against the vehicle purchase.
According to the guidelines of the CARS system (or Cash for Clunkers Program) a person includes companies, corporations, firms and partnerships along with individuals.
What You Need To Know To Qualify Your Business Vehicle For The Cash for Clunkers Program
There are several things you must know when it comes to qualifying your company vehicle for the “Cash For Clunkers” program. They include:
- It’s applied to both vehicle sales and leases.
- Only new vehicle models are accepted (2008, 2009 and 2010).
- You must buy the vehicle before Nov. 1, 2009.
- The vehicle being turned in should still be in driving condition.
- You need to have a title that’s clean… no liens.
- Person/or company entity on the vehicle title will need to be the same person/entity that’s purchasing a -vehicle.
- Fuel economy found on fueleconomy.gov is the standard.
- Size of rebate will depend on the mileage being saved; $3,500 for less savings and $4,500 for additional savings between the new and old vehicle.
Requirements For Mileage
New vehicles must meet the following lowest fuel economy rating:
- Passenger vehicles – 22mpg
- Light duty trucks – 18mpg
- Big light-duty trucks – 15mpg
- Commercial trucks – no set low mileage but trade in must be before 2002.
How Does This Effect Taxes For Businesses
The voucher value is tax-free. According to the Final Rule, The CARS Act does not give income to the buyer. However, it does not address other possible tax issues. If the state you live in imposes a sales tax on vehicles purchases, the tax will still take effect.
Should You Buy Or Lease
This government cash for clunkers program does permit you to purchase or lease your business vehicle. But what’s better? That depends on you and your circumstances.