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Law says 4% over "base" in 2001- BUT "base" is ?? (archive)

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Posted by SteveB on December 04, 2000 at 19:58:56:

In Reply to: What's 2001 Lux Tax, MEthinks 4%over40K but IRS posted by won't confirm - SteveB on December 04, 2000 at 18:06:27:

My '01, Jan build is the source of my question. Dealer wrote order with '00 lux tax (5% over $38K) and statement subject to '01 tax.

It is the infaltion adjustment that I am trying to determine. Dealer says IRS won't discuss what '01 base amount will be.

It should be adjusted as rounded to increments of $2K per code below. Historically, it has gone up $2K per year (I guess I buy too many cars).

And another thing HOW DOES THE GOVERNMENT TAX A TAX? I think it sucks that the Lux Tax includes the Gas Guzzler Tax that is represented as part of the MSRP: :(


relevant section of code: USC Title 26 Chap 31 Sec 4001


(e) Inflation adjustment
(1) In general
The $30,000 amount in subsection (a) shall be increased by an
amount equal to -
(A) $30,000, multiplied by
(B) the cost-of-living adjustment under section 1(f)(3) for
the calendar year in which the vehicle is sold, determined by
substituting ''calendar year 1990'' for ''calendar year 1992''
in subparagraph (B) thereof.
(2) Rounding
If any amount as adjusted under paragraph (1) is not a multiple
of $2,000, such amount shall be rounded to the next lowest
multiple of $2,000.
(f) Phasedown
For sales occurring in calendar years after 1995 and before 2003,
subsection (a)(1) and section 4003(a) shall be applied by
substituting for ''10 percent'', each place it appears, the
percentage determined in accordance with the following table:
If the calendar year is: The percentage is:
1996 9 percent
1997 8 percent
1998 7 percent
1999 6 percent
2000 5 percent
2001 4 percent
2002 3 percent .
(g) Termination
The taxes imposed by this section and section 4003 shall not
apply to any sale, use, or installation after December 31, 2002.





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