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Cash For Clunkers Boosts State Revenues

August 3rd, 2009 by flanews

Car dealers across the state are coming off a record breaking week. The Cash for Clunkers program sent car sales soaring, but now the program is out of gas. Car sales are one of the biggest tax generators and as Whitney Ray tells us, revenue collected from the program could help the state out of a three year budget deficit.

At Tallahassee Ford Lincoln Mercury it took no time for the Cash for Clunkers program to go from zero to 60.

“We sold out of most carlines that qualified for the clunker program.”

But now Cash for Clunkers is out of gas, burning through a billion dollars in less than a week.

“All the dealers are operating on the pretense that the Senate will pass this extra two billion dollars,” said Mickey Antkinson, new car sales manager at Tallahassee Ford.

If Congress votes to extend the program, Florida stands to gain millions in sales tax collections. Car sales account for one in five sales tax dollars in the state’s bank account.

Before the program kicked off tax collections from car sales fell 20 percent. Rob Weissert a spokesman for Florida TaxWatch said a boost in car sales will bring in millions of revenue dollars for the state.

“Auto sales and accessories are the 3rd largest category of sales tax revenue collections and sales tax revenue makes up around 75 percent of the general revenue the state collects every year,” said Weissert.

Car dealerships also employee 75-thousand Floridians.

“The economy depends on them. Their local areas depend on them and their employees depend on the jobs, so this shot in the arm is important, said Ted Smith, President of the Florida Auto Dealers Association

The success of the program is putting pressure on the US Senate to pass an extension quickly. There’s concern that car dealers have already handed out more than a billion dollars in rebates. Dealerships say an extension may be needed simply to pay all the current claims.

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