Question: Can My Business Qualify for the "Cash for Clunkers" Program?
The Car Allowance Rebate System is a bill passed by Congress in July 2009 and funded for an additional $2 billion on August 7, 2009. The bill allows individuals to trade in "Clunkers" (vehicles with low gas mileage) for vehicles which get better gas mileage and get a credit of either $3500 or $4500 against the purchase. The amount of the credit depends on the difference between the gas mileage of the vehicle being traded in vs.
the gas mileage of the vehicle being purchased.
Answer:
The Final Rules of the CARS System (better known as the "Cash for Clunkers" Program) define a "person" to include corporations, companies, firms, and partnerships, as well as individuals.
Here are some things you should know about qualifying your business vehicle for this program:
Mileage Requirements
The minimum fuel economy rating for the new vehicle is:
Tax Effect to Businesses
The value of the voucher is tax-free. The Final Rule says: "The CARS Act provides that the credit is not income to the purchaser, but does not address any other possible tax issues." If your state imposes sales tax on vehicle purchases, that tax is still in effect.
Buy or Lease?
The "Cash for Clunkers" program allows you to buy or lease a business vehicle. But which is better? Read more about Buying vs. Leasing a Business Vehicle and about Lease Costsbefore you make your decision.
The Car Allowance Rebate System is a bill passed by Congress in July 2009 and funded for an additional $2 billion on August 7, 2009. The bill allows individuals to trade in "Clunkers" (vehicles with low gas mileage) for vehicles which get better gas mileage and get a credit of either $3500 or $4500 against the purchase. The amount of the credit depends on the difference between the gas mileage of the vehicle being traded in vs.
the gas mileage of the vehicle being purchased.
Answer:
The Final Rules of the CARS System (better known as the "Cash for Clunkers" Program) define a "person" to include corporations, companies, firms, and partnerships, as well as individuals.
Here are some things you should know about qualifying your business vehicle for this program:
- The allowance applies to both car leases as well as sales
- Only new cars are included (2008, 2009, 2010 models)
- The car cannot cost more than $45,000
- You must purchase before November 1, 2009
- Your clunker has to be driveable
- You must have a clean title to the vehicle (that is, it cannot have a lien against it)
- The person or business entity on the title must be the same as the person or business that is buying the vehicle
- The fuel mileage on fueleconomy.gov is the standard being used
- The size of the rebate depends on the mileage saving; $3500 for less saving, $4500 for more saving (the difference between the rating of the new car vs. the one being traded in).
Mileage Requirements
The minimum fuel economy rating for the new vehicle is:
- For passenger cars, 22 mpg
- For light duty trucks, 18 mpg
- For large light-duty trucks, 15 mpg
- For commercial trucks, there is no minimum mileage, but the trade-in must be at least pre-2002.
Tax Effect to Businesses
The value of the voucher is tax-free. The Final Rule says: "The CARS Act provides that the credit is not income to the purchaser, but does not address any other possible tax issues." If your state imposes sales tax on vehicle purchases, that tax is still in effect.
Buy or Lease?
The "Cash for Clunkers" program allows you to buy or lease a business vehicle. But which is better? Read more about Buying vs. Leasing a Business Vehicle and about Lease Costsbefore you make your decision.
SHARE
