On July 1st, a tax cut for Kansans buying automobiles went away. For three years there had been an exemption that protected taxpayers from being taxed on savings that they received from automobile dealership rebates. For instance, if one received a $5,000 rebate on a $35,000 car, as of July 1st an individual would have to pay a sales tax of 7.45 percent on the $5,000 in savings, a cost to the purchaser of $372 more.
In 2009, the legislature was able to pass an extension to exempt these rebates from the 7.45 percent sales tax that buyers face in Kansas. After passing through the legislature, then Governor Kathleen Sebelius vetoed this measure which would have avoided a tax increase. This tax cut would have been helpful to auto dealerships looking to sell cars in this economy, but instead she decided to error on the side of feeding government more money rather than making further cuts in spending. She said, "While the intent of this legislation is good…..given the incredible economic challenges and revenue deficits we are facing, we simply are not able to offer these additional tax breaks right now."
Unfortunately, Kathleen Sebelius chose to punish the taxpayer and the private sector rather than cutting government. Maybe next year the legislature can pass this tax cut again and provide real relief to taxpayers and businesses trying to make a living selling cars.
Photo Credit: Your Pal Dave