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Sonic Automotive paying dividend early

CHARLOTTE, N.C. (AP) -- Sonic Automotive Inc. said Monday that it will pay its quarterly dividend earlier than planned, allowing its investors to take advantage of current low tax rates on dividend income.

The company will pay its 25 cents per share on Dec. 21 to stockholders of record on Dec. 14.

Sonic previously planned to make the payment on Jan. 15.

The automotive retailer is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially higher taxes on dividend income starting in January.

Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends could be taxed as ordinary income in 2013, the same as wages, so rates would go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

Sonic shares fell 7 cents to close at $19.67.