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When:
January 01, 2002

Who it Affects:
For taxpayers who buy luxury cars and other expensive items.
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2002 Tax Law Changes
Luxury excise tax wont sting so much in 2002.

For taxpayers who buy expensive cars and boats.

Got a hankering for a bigger, really expensive car? Theres a bit less sting for 2002 over 2001 from the federal luxury excise tax. The rate fell to 3% of the amount by which the sales price exceeds $40,000. That down from 4% in 2001 on the excess over $38,000. That means if you were lucky enough to afford a $50,000 car in 2002, your luxury tax comes to $300.

In 2003, you get a bigger break. The tax expires.

Related Tax Article(s): How to save $10,000 on your next car