2009 Stimulus Plan for Motorcycles

Details of the new stimulus package signed into law on 2/17/09 include benefits for purchasers of new motorcycles. We have requested details on the package and received the following information directly from the AMA Government relations office.

What Motorcycle purchase qualifies for a tax deduction?
1. Must be purchased from February 17 through Jan. 1, 2010
2. The Motorcycle must be less than 8,500 lbs Gross Vehicle Weight
3. Cost less than $49,500
4. Buyer must make less than $125,000 in gross taxable income ($250,000 for joint filers)
5. Deduction is phased out for taxpayers with modified adjusted gross income between $125,000 and $135,000
($250,000 and $260,000 for joint filing).
6. If you meet the criteria, you will be able to deduct the sales tax and excise tax from your 2009 tax return.

What qualifies as a motorcycle, according to the Economic Stimulus bill?
In the Economic Stimulus bill, Motorcycle is defined under section 571.3 of title 49, Code of Federal Regulations (CFR) (in effect on the date of the enactment). Section 571.3 of Title 49 CFR:
“Motorcycle means a motor vehicle with motive power having a seat or saddle for the use of the rider and designed to travel on not more than three wheels in contact with the ground. Motor-driven cycle means a motorcycle with a motor that produces 5-brake horsepower or less.”

These details should help interpret the Stimulus Plan with regard to new motorcycle purchases. As with all tax issues you should consult your tax advisor. You must keep yourself informed. The government may issue regulations to clarify the bill.