CAR Act

Key Points

• Rep. Perry introduced a bill called the CAR Act that would change how the government taxes the sale of classic or collector cars. Currently, these cars are taxed as "collectibles," which often carries a higher tax rate than other investments like stocks.
• If this bill becomes law, cars would no longer be in the same tax category as things like rare coins or art. This means people who sell a car for more than they paid for it would likely pay a lower capital gains tax rate on their profit.
• This change would apply to car sales starting in 2026. It is designed to help car enthusiasts and collectors keep more of their money when they sell a vehicle that has gone up in value over the years.
• Currently, the top tax rate for "collectibles" is 28%. By removing cars from this list, the bill would allow car owners to benefit from the lower tax rates usually reserved for long-term investments, which are often 15% or 20%.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.