Businesses that sell vehicles, aircraft and boats may want to provide feedback on the new federal luxury tax set to apply as of January 1, 2022. Finance recently released details of its proposed framework for the new tax regime, which will apply to certain vehicles, aircraft and boats delivered after December 2021 for which a sales agreement was entered into after April 19, 2021. Finance's release outlines the new luxury tax obligations for vendors, importers and purchasers and discusses related administrative guidelines and transition rules. Finance will accept comments on the proposed new luxury tax framework until September 30, 2021, and is expected to consider this feedback when drafting the related legislation.
Affected businesses should review Finance's proposed framework, including the transitional rules, to determine how they may apply to their sales of vehicles, boats and aircraft. In some cases, sales agreements signed since April 20, 2021 may be subject to the luxury tax under this framework.
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