In an effort to revive auto purchases, a 90 day state tax break on car sales may be in the works in Tallahassee, as car sales in Florida continue to fall.
Three out of every 10 customers who try to buy a car can’t get credit. Those who can, according to the Florida Chamber of Commerce, are too scared to spend their money.
“What we’re seeing right now is a crisis of confidence in the consumer, not so sure they’re going to have a job. Not so sure what the economy is going to do, and so they’re sitting on their money,” said David Daniels with the Florida Chamber of Commerce.
Car sales in Florida are down 50 percent since this summer; bad news for the 76,000 Floridians who work in dealerships. It’s also bad news for the state. One in five sales tax dollars collected in Florida is generated though auto sales. Car dealers are asking lawmakers to consider a temporary ban on the state’s auto sales tax.
“If Florida derives so much of its income from car sales and car sales are being so repressed, why not considers reducing the sales tax over some period of time. We’re saying 90 days,” said Florida Auto Dealers Association President Ted Smith.
Representative J.C. Planas said he’s not sure the industry deserves special treatment but he is willing to consider the plan.
“You have to look at what the cost to the state is to be able to do that. If all of a sudden you realize that the banks are lending money again, that might not be a bad way to kick start that boom again,” said Planas.
While a sales tax break would be left up to the state, getting banks to open lines of credit may be a harder sell. Car dealers could get a break from Washington. US Senators are considering lifting interest rate taxes on auto loans as part of the economic stimulus package.
Source: flanews.com
