Aug 4, 2009 6:38 pm US/Central
Reality Check: Cash For Clunkers In Minnesota
(WCCO)
Minnesota ranks in the top 10 states in the country for participation in the popular Cash for Clunkers program, according to U.S. Sen. Amy Klobuchar.
Klobuchar said Minnesota car dealers have requested over $26 million in vouchers so far. But the car buying boom may not drive up state revenues.
Car dealers say they are moving out more vehicles than they have in months. It's the state of Minnesota that might have
sticker shock.
It's TRUE.
The federal government is offering up to $4500 to trade in a gas guzzler. That's off the price of a new fuel efficient car.
Some dealers are matching it in incentives.
But the state won't get a tax bump because drivers
pay a sales tax on a much lower price.
Here's what you NEED TO KNOW.
Every car sold in Minnesota pays a 6.5 percent sales tax on the selling price.
We won't have exact numbers until next month but based on 7500
Cars for Clunkers, the state is losing an estimated $1.7 million and $4.3 million in
tax revenues.
Here's the REALITY.
Without Cash for Clunkers, car sales would have hit a very bumpy road.
Instead it has boosted dealers by 30 percent but that's only enough to drive sales to about where they were in July last year.
That's Reality Check.
To check the resources for this Reality Check click on the links below.
FY2009 Revenues $150 Million Below Forecast
Minnesota Automobile Dealers Association
Minnesota Revenue: Cash For Clunkers
Spurring Sales, Car Rebate Plan Is Left Up in Air
2009 Minnesota Tax Incidence Study
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