A customer who purchases a new vehicle this year may be entitled to a special tax break on their 2009 federal tax return.

State and local sales taxes paid on up to $49,500 of the purchase price of qualifying vehicles are deductible. (If your state does not assess sales tax on vehicle sales, a customer is permitted to deduct vehicle excise taxes.)

Qualified motor vehicles generally include new (not used) cars, light trucks, motor homes and motorcycles.

Some other rules are:

• Purchases must occur after Feb. 16, 2009, and before Jan. 1, 2010.
• This deduction can be taken regardless of whether or not the customer itemizes other deductions on their tax return.
• The amount of the deduction is phased out for customers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers.

We suggest that dealership employees use this information as a closing tool in the closing months of 2009. We also suggest that dealers communicate with their qualifying customers to alert them of this opportunity…the customer goodwill could be significant.