WASHINGTON, D.C. – The American Recovery and Reinvestment Act of 2009, proposed by the U.S. Senate Finance Committee, has passed on the Senate floor and will now be negotiated in a House-Senate Conference Committee that will review the $838 billion plan that includes tax assistance to encourage new vehicle purchases.
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Automotive Service Association (ASA) collision members have followed closely new car purchase provisions originally offered by Sen. Barbara Mikulski, D-Md. Insurers are generally less likely to total new vehicles after an accident than older vehicles. The legislation, as of this writing, includes language offered by Mikulski that will provide a tax credit of approximately $1,553 for a $25,000 vehicle.
The Auto Ownership Tax Assistance Amendment makes interest payments on car loans and state sales or excise car tax deductible for new cars purchased between Nov. 12, 2008, and Dec. 31, 2009.
Sen. Tom Harkin, D-Iowa, did place his cash for clunkers amendment on the list of amendments to be considered on the floor of the Senate during the stimulus legislation debate. Harkin’s amendment tied the cash for clunkers policy to fuel efficiency. ASA did not support Harkin’s amendment because it did not include a repair option. Texas and California cash for clunkers programs have repair provisions that both ASA and the National Automobile Dealers Association have encouraged Congress to review. Harkin briefly discussed the amendment on the floor but withdrew it prior to consideration.
Other key provisions of the American Recovery and Reinvestment Act of 2009 are:
1. Extension and Increase of Unemployment Insurance
2. General Aid to States
3. The “Making Work Pay” Tax Credit
4. Other Provisions for Seniors, SSI Recipients and Disabled Veterans
5. Job-creating Incentives for New Energy Technology and Development
6. Small Business Help for Quicker Recovery
More information on the American Recovery and Reinvestment Act of 2009 will soon be available on ASA’s legislative Web site, www.TakingTheHill.com.
