Texans Shop for Big Ticket Items Before Federal Sales Tax Change

View Comments ()
|
Email
|
Print

    NEWSLETTERS

    Time is running out on a big tax break in Texas. The sales tax exemption is going away in 2014 and many people are buying big ticket items, like cars, before the year ends. (Published Monday, Dec 30, 2013)

    Looking to buy a new car or boat? You might want to get it before you ring in the New Year.

    Beginning in 2014, the IRS will no longer allow Texans to deduct sales tax on their federal income tax return.

    "It's a big change, it's a big change," said Kelli Strube, a certified public accountant with McIvain & Associates in Colleyville.

    She and other CPAs have been advising clients to purchase any big ticket items before year end.

    "It's a big chunk of change," said Strube. "Most of my clients are going to see a $2,000 to $4,000 difference in what they can reduce their taxable income by."

    Car sales are way up, driven in part by new owners looking to reduce their 2013 income tax by paying the sales tax on a new car, worth 6.25 percent.

    "I think that's one of the reasons we've seen an increase this year over historic Decembers," said Eric Bryant, General Sales Manager at Classic Chevrolet in Grapevine.

    "You know it's always an exciting time of year but we've seen about a 20 percent increase after Christmas day in and day out, it's been amazing”," said Bryant.

    Jennifer Pearce and her husband bought two new vehicles before time runs out.

    "That was going to be a big part of it, to help with deductions and to help with a little bit more money back," said Pearce.

    The change affects anyone who itemizes, so unless Congress acts to reverse the change, many people in Texas will wind up paying much more in taxes in 2014.