The luxury auto tax rate will decrease to four percent, effective Jan. 1, 2001, according to the National Automobile Dealers Association (NADA). The Internal Revenue Service (IRS) also has determined that the threshold for computing the luxury automobile excise tax during calendar year 2001 will remain at $38,000, according to NADA. The decision was made according to IRS Rev. Proc. 2001-13, which provides inflation adjusted tax tables for several items. Both steps taken by the IRS are in accordance with the phase out legislation enacted in 1996, NADA said.
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