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Brad Wood, the general manager for Gerry Wood Honda in Salisbury, said, "It was an excellent program."
Or so he and many others thought. Now in week three, he and hundreds of other dealerships are asking: Where's the money?
"We've got a little over $330,000 owed to us from the government at this time," Wood said.
Down the road in Concord at Ben Mynatt GM, general manager Todd Rakes said, "I know a lot of dealerships out there that have not been paid on any. We've been paid on four, just as of today."
So we did some digging to find out why. Turns out the response to Cash for Clunkers was so overwhelming that the 250 or so government auditors couldn't keep up with the hundreds of thousands of applications coming across their desks.
But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.
"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.
So you get nailed at least once and possibly twice. Specifically, you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500!) and what's worse those states that tax income (that would be most of them!) might wind up counting this as income for state income tax purposes too, effectively taxing you twice.
So dealers are on the hook for money, people are now going to be taxed on the rebate money and the only winners out of this whole thing are the banks and the new loans they made to people who probably had paid off cars. The car industry also got a boost temporarily.