View Full Version : [Car taxes] does this sound right to you guys
vetteman9368
08-17-2011, 7:00am
the tag office is trying to charge me the tax based on the sale price before the rebates. Its $5k difference, and its my contention that the sale price is what i actually paid for it. What say you great OT?
the tag office is trying to charge me the tax based on the sale price before the rebates. Its $5k difference, and its my contention that the sale price is what i actually paid for it. What say you great OT?
I have heard that rebates do not reduce the taxable amount here, but I's guess it varies by state. :rolleyes:
It is considered part of your down payment, not the price of the car.
I have heard that rebates do not reduce the taxable amount here, but I's guess it varies by state. :rolleyes:
It is considered part of your down payment, not the price of the car.
what if you pay cash for the car?
what if you pay cash for the cars, houses and everytning in between like I do?
Fixed.:shots:
Fixed.:shots:
moot and not 100% accurate.
back to my question...what if you pay cash for the car? is the rebate taxed?
what if you pay cash for the car?
You still pay taxes on any other purchase if you pay cash.
Why would it be any different?
down payment does not reduce your tax liability.
The only way to do that is to have a trade-in...
MYTH 4:
Rebates are always subtracted from the negotiated selling price.
Car salesmen (and dealership ads) sometimes infer that the rebate is automatically subtracted from the purchase price ("You can buy this $19,000 car for only $18,000 after the $1,000 rebate!"). These claims can be misleading. More to the point, they may actually be untrue. In most states, the rebate is considered part of your down payment. If so, the way it works is this: first the dealership adds up the negotiated purchase price, applicable taxes, license fees, doc fees, etc. into a Grand Total. THEN they subtract the down payment - including the rebate - from that total price. That's the legal manner in which rebates are handled in most states. (NOTE: In a few states, the rebate may, indeed, legally be subtracted from the selling price of the vehicle before taxes are added in. Be sure to ask your car salesman about the laws concerning rebates in your state.)
You still pay taxes on any other purchase if you pay cash.
Why would it be any different?
down payment does not reduce your tax liability.
The only way to do that is to have a trade-in...
so, you are saying that if I buy a 30K MSRP car with cash...and it has a 3K rebate...my purchase price is 27K, but I pay sales tax on 30K?
so, you are saying that if I buy a 30K MSRP car with cash...and it has a 3K rebate...my purchase price is 27K, but I pay sales tax on 30K?
Here, and most states...yes.
Here, and most states...yes.
that blows
I need to look at my past purchase agreements for curiosity sake.
thanks
that blows
I need to look at my past purchase agreements for curiosity sake.
thanks
I did an in & out when I sold my C5 and put the proceeds toward my G8 a few years ago when there were pretty large rebates.
I was expecting to be taxed on the $9k difference after the "trade in" and rebates, but I was taxed on something along the lines of $14k-$15k.
It's been a few years, so the numbers are a little hazy, but that was the only reason I knew about this. :yesnod:
I think it is only rebates that are handled this way...
So if there are other discounts off of MSRP, you don't necessarily get taxed off the MSRP.
In NH, there is no sales tax. However, they nail you on the registration, which is based on their book value of the vehicle, not the actual purchase price.
Millenium Vette
08-17-2011, 9:29am
so, you are saying that if I buy a 30K MSRP car with cash...and it has a 3K rebate...my purchase price is 27K, but I pay sales tax on 30K?
Here, and most states...yes.
:iagree:
In NH, there is no sales tax. However, they nail you on the registration, which is based on their book value of the vehicle, not the actual purchase price.
In Michigan they nail you for 6% sales tax and the annual registration fee is based on the original base MSRP of the vehicle. Oh, and your trade doesn't reduce the sales tax amount.
GRN ENVY
08-17-2011, 9:43am
When I bought my truck last year, they were asking 18.9K I got it down to 17.6 and with taxes is was 18,687.65, I actually paid 19,100.00 I recieved a refund check for the overage, which was nice. I put down 7,100 in cash. I still had to pay tax on the agreed price, the rebate is considered cash down out of your pocket, even though they give it to you
In NH, there is no sales tax. However, they nail you on the registration, which is based on their book value of the vehicle, not the actual purchase price.
How often?
bsmith
08-17-2011, 10:02am
In NH, there is no sales tax. However, they nail you on the registration, which is based on their book value of the vehicle, not the actual purchase price.
Here, we pay a sales tax and annual registration based on their book value. :ack:
How often?
Annually. :ack: Thankfully, the value, thus the registration fee, depreciates over time.
Silliest crap I ever heard.
States are getting real chickenshit when they are trying to charge sales tax on MSRP and not the actual selling price of a new vehicle.
Yes, if you are trying to BS them on a used car, then they can pull the book on you.
Buying for cash has no relevance.
How about they get rid of some those dead-weight state workers?
C5SilverBullet
08-17-2011, 11:21am
Some states do that. Texas only does it on a lease, but there are those who tax the rebate.
Some states do that. Texas only does it on a lease, but there are those who tax the rebate.
F 'em.
Silliest crap I ever heard.
States are getting real chickenshit when they are trying to charge sales tax on MSRP and not the actual selling price of a new vehicle.
Yes, if you are trying to BS them on a used car, then they can pull the book on you.
Buying for cash has no relevance.
How about they get rid of some those dead-weight state workers?
They're not taxing you on MSRP - they are treating the rebate as an addon to the negotiated out the door price of the car. When you think about it, the actual sales price is $20,000, they are just giving you a $3,000 rebate and charging you $17,000.
Most states work this way because sales tax is due on the greater of the purchase price or the fair market value of the item sold. The only way to change it would be to do away with rebates and simply charge less for the cars.
FTR, leasing is even worse. Your monthly lease payment is a combination of depreciation cost for use of the car plus a financing charge. You pay sales tax on the full lease payment so you're actually paying tax on the financing as well as the depreciation. You can figure you'll pay about 10% more sales tax by leasing (e.g., if you sales tax on a purchase would have been $5,000, you can expect to pay $5,500 in sales tax over the life of he lease and assuming you exercise the purchase option). More if your money factor is high.
They're not taxing you on MSRP - they are treating the rebate as an addon to the negotiated out the door price of the car. When you think about it, the actual sales price is $20,000, they are just giving you a $3,000 rebate and charging you $17,000.
Most states work this way because sales tax is due on the greater of the purchase price or the fair market value of the item sold. The only way to change it would be to do away with rebates and simply charge less for the cars.
FTR, leasing is even worse. Your monthly lease payment is a combination of depreciation cost for use of the car plus a financing charge. You pay sales tax on the full lease payment so you're actually paying tax on the financing as well as the depreciation. You can figure you'll pay about 10% more sales tax by leasing (e.g., if you sales tax on a purchase would have been $5,000, you can expect to pay $5,500 in sales tax over the life of he lease and assuming you exercise the purchase option). More if your money factor is high.
OK, thanks for the explanation.:cheers:
My heartburn is that the FMV of the vehicle really is what you pay for it (excluding fakers who buy used and try to claim a super-low price to avoid sales tax).
I could argue, fairly I think, that the selling price is what I pay for it and since every single person gets the rebate, doesn't that become the real price?
Punk Boy
08-17-2011, 1:52pm
They're not taxing you on MSRP - they are treating the rebate as an addon to the negotiated out the door price of the car. When you think about it, the actual sales price is $20,000, they are just giving you a $3,000 rebate and charging you $17,000.
Most states work this way because sales tax is due on the greater of the purchase price or the fair market value of the item sold. The only way to change it would be to do away with rebates and simply charge less for the cars.
FTR, leasing is even worse. Your monthly lease payment is a combination of depreciation cost for use of the car plus a financing charge. You pay sales tax on the full lease payment so you're actually paying tax on the financing as well as the depreciation. You can figure you'll pay about 10% more sales tax by leasing (e.g., if you sales tax on a purchase would have been $5,000, you can expect to pay $5,500 in sales tax over the life of he lease and assuming you exercise the purchase option). More if your money factor is high.
that sucks......if something is on sale at the grocery you only pay tax on the sale price.....if it was 2 dollars and now on sale for a dollar you pay sales tax on the dollar....
that sucks......if something is on sale at the grocery you only pay tax on the sale price.....if it was 2 dollars and now on sale for a dollar you pay sales tax on the dollar....
But a sale price is different than a rebate...
How do grocery stores handle coupons?
Are the coupons done before tax is calculated or after? :waiting:
A coupon should be treated the same as a rebate IMO.
OK, thanks for the explanation.:cheers:
My heartburn is that the FMV of the vehicle really is what you pay for it (excluding fakers who buy used and try to claim a super-low price to avoid sales tax).
I could argue, fairly I think, that the selling price is what I pay for it and since every single person gets the rebate, doesn't that become the real price?
Not everybody qualifies for every rebate. I think the .gov views it as "why should we treat the sales price as lower just because you got an extra $1,000 off for being a returning customer" or some such? I think I got three different rebates when I bought my Corvette and they are all cross-marketing discounts that have little to do with the value of the car.
bsmith - coupons just come off the total bill. We don't have a sales tax on groceries, but on other items you pay tax on the gross and then the coupons come off.
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