Hello and welcome to Money Girls quick and dirty tips for a richer life.

I'm your host, Laura Adams.

In this show I'll discuss the new vehicle sales tax deduction,

a tax break that's available for most vehicles purchased after February 16th of this year.

If the purchase of a new car, light truck, motorhome, or motorcycle is in your budget this year,

the IRS wants to steer you toward making a deal by offering a new tax break.

To qualify, you must meet the following three conditions.

Number one, you must purchase a vehicle sometime between February 16th and December 31st of 2009.

Number two, you must purchase a passenger vehicle with a gross weight that doesn't exceed 8,500 pounds.

Motorhomes are an exception. They don't have a weight restriction.

And three, you must be the first owner of the vehicle, regardless of the model year. It can't be used, pre-owned, or

leased to qualify. You can claim the deduction for as many new vehicles as you'd like to buy.

You're allowed to deduct state and local sales and excise. new vehicles up to

up to $49,000 as you'd like to buy. You're allowed to deduct state and local sales

up to $49,500 of the purchase price.

Here's an example to see how the tax deduction would work.

Let's say you live in an area with 6% sales tax and you buy a new car that costs $50,000.

You'd be eligible to deduct the sales tax for the maximum allowable amount of 49,500.

6% of 49,500 is 2,970.

So, the deduction would reduce your taxable income by $2,970.

If you were in the 28% tax bracket, the deduction would save you over $831 on your tax bill, or if you're due a refund, it would increase by that amount.

But what if you live in a state that doesn't charge sales tax like Alaska, Delaware, Hawaii, Montana, New

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