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Written by Steven Daily, LawServer Attorney-Editor
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July 27, 2009 |
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California car buyers taking advantage of the federal "Cash for Clunkers" program may get blindsided by a surprising tax hit. Under the federal law, the Cash for Clunkers credit will not be treated as income on federal returns. But according to an authority on California tax issues, Spidell Publishing, because California has not enacted legislation to conform its definition of "income" to federal law, "We believe that unless the Legislature enacts conforming legislation, the voucher will be treated as gross income for California purposes." For critics of the federal law, this in another argument that buyers should beware. It is believed that most other states will follow the federal government's lead and exclude the Cash for Clunkers credit from income.
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