Gas guzzler owners may find relief

May 12, 2008 7:18:04 PM PDT
There is a new plan to help you save some money on your next car. It's a tax break that might also put more fuel efficient cars out on California roads.

"Yeah, I have to get gas everyday," says SUV owner Paul Cantarutti.

With gas prices the way they are, Paul laments the mileage he's getting with his older SUV.

"Like 15 miles per gallon, maybe. Since it's older, it's getting less now."

To help Californians like Paul, one state lawmaker wants to lower the sales tax for new vehicles. You trade in your old car. Then, you subtract the trade-in value from the price of the new car. You only pay sales tax on the difference. The average savings is $600.

"It would take older, more polluting cars off the road. In exchange, people would be buying newer cars that are more fuel efficient and have less emissions," says State Senator Dennis Hollingsworth.

With new car sales nationwide forecasted to drop four percent this year, Senator Hollingsworth thinks it'll also help stimulate the economy.

The state Board of Equalization estimates California would lose out on $400 million in sales tax, but Democrats, who are usually environmentally friendly, say we can't afford such tax breaks during these tough budget times.

"I think it's something that we should look at when the sun is shining fiscally, but that's not this year," Assemblyman John Laird.

And some tax groups are wondering if this would open the door up for other items.

"Yeah, I'll trade in my guitar for that guitar and I won't pay the sales tax on it. Really. Any number of items. It really makes the law complex," says Lenny Goldberg of the California Tax Reform Association.

If the proposal passed, Paul would trade in his SUV for a hybrid in a heartbeat.

"You're talking about 40-50 miles a gallon. So they get gas maybe once a week."

The bill will heard in comitte Wednesday. 33 other states have a similar tax break in place.


Load Comments