So far, 2009 sales have been strong at Evergreen Subaru in Auburn without the government’s help, but owner Doug Weisz isn’t about to turn away another incentive.

“Any discount is going to help and essentially, this creates a discount,” he said Tuesday.

The Internal Revenue Service this week began touting a car-buying consumer stimulus tucked into the American Recovery and Reinvestment Act. It applies to new vehicles bought between Feb. 16 this year and Jan. 1, 2010.

On next year’s taxes, according to an IRS spokeswoman, buyers will be able to claim their excise tax as a deduction on the short form. The deduction previously was limited to people who itemized. In addition, instead of claiming either the state and local sales tax deduction or the income tax deduction on the federal form, for this one year filers can claim the income tax deduction and take a deduction for the sales tax on a new auto.

“A lot of people could benefit from this,” said the IRS’ Peggy Riley. “It’s hoping to help stimulate car sales.”

Even though the deductions can’t be taken for this tax season, the IRS is trying to get information out that purchases this year will result in a tax reduction next year, Riley said.

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The tax breaks apply to new cars, light trucks, motor homes and motorcycles that cost up to $49,500, according to an IRS news release. The full incentive is limited to people who make less than $125,000 and couples who earn less than $250,000.

Maine Revenue Services estimated that Mainers would save $5.5 million this year, said Mike Allen, director of economic research. Savings will vary by the buyer’s income and the price of the auto, but, in a rough example, he said a single person earning $60,000 a year who buys a $20,000 car would pocket $250 next year from the saved sales tax.

“We’re not forecasting car sales to be all that great this year,” Allen said. He believed mostly higher-income buyers would take advantage of the tax break.

Weisz at Evergreen Subaru said his sales this winter have been good, due to his vehicles’ fuel-efficiency and all-wheel-drive option.

Jake Anderson, general sales manager at Rowe Auburn, said his sales also have been strong. After having to cut staff over the past six months, his dealership is ready to hire three salespeople in the next month.

He’s seeing pent-up demand, vehicles that need to be replaced and a little more confidence in the economy.

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“I think the news hasn’t been so horrific lately,” Anderson said. “It’s been like an even keel, which people need.”

Special offers have already spurred sales. He saw more interest in Hyundai with that car manufacturer’s offer to take back the car if a buyer lost their job within 12 months of purchase or pick up three months of payments. That deal was set to expire Tuesday.

One offer rolled out Tuesday that caught even Anderson’s dealership by surprise: the new Ford Advantage Program. If a new Ford buyer loses his or her job for certain reasons during the life of the loan, Ford is offering to make up to 12 payments, which wouldn’t get tacked on at the end of the loan.

“We’ve sold two Fords this morning” as a direct result, Anderson said.

General Motors issued a similar incentive.

John Emerson, who owns Emerson Chevrolet in Auburn, said he would anticipate that, once word gets out, the new federal tax breaks would have a positive effect on his dealership’s bottom line.

“If someone’s been considering a new vehicle, but kind of on the fence,” Emerson said, this could be enough to put them over.


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