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The Republican-led Michigan Legislature voted Wednesday (Jan. 17) to override Gov. Rick Snyder’s veto of a speedier tax cut for those who trade in their car or RV for a new one, the first override in his tenure and just the fourth in the last 67 years.

As reported by the Associated Press, Senate Majority Leader Arlan Meekhof said the “timing was right” — the same day the chamber approved a bill to keep intact and boost Michigan’s personal tax exemption, which is at risk of being eliminated under the recent federal tax overhaul due to the way the state tax code is linked to the U.S. code. He and House Speaker Tom Leonard downplayed any concerns that the override will cause a rift in their relationship with the Republican governor.

The Senate voted unanimously to override Snyder. The House voted 85-23 — more than the two-thirds support needed.

Bill Sheffer, executive director of the Michigan Association of Recreation Vehicles and Campgrounds (MARVAC) told RVBUSINESS.com, “We were first able to create trade-in sales tax legislation for auto, RV and boating about five years ago. The bill was passed, but it was implemented in small increments. We kept pounding and in 2017 passed legislation in the House and Senate to cover the full amount of a trade-in against the sales tax of a new vehicle.

“It went to Gov. Snyder and he vetoed it. We talked to our friends in the legislature and yesterday the House and Senate overturned the veto. The best news of all is that it is retroactive to the first of January. So all show season, people shopping for new RVs that are looking to trade in their old vehicle will receive the full amount off the sales tax.”

A law enacted in 2013 lets those who purchase a car or RV subtract the value of their trade-in from the sales price of a new one for tax purposes. The laws passed Wednesday more quickly phase in how much of the trade-in value can be deducted.

The credit now is $4,000 — saving people up to $240 in taxes — and rises $500 annually until 2039, at which point there will be no limit on the trade-in value excluded from taxation. The laws speed the phase-in of the tax break for car purchases to 2029, a decade sooner. The trade-in credit jumps to $5,000 in 2019 and increases by $1,000 each year after.

The laws also fully exempt from taxation the value of an RV trade-in used to buy a new RV, mirroring a provision for boats included in the 2013 law.

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