Andy

Hi everyone,
I did a trade in and got my 240 in april. I paid the sale tax for the full value of the car. Is it true that sale tax should apply for the amount after subtract trade-in value? If it is, can I ask the dealer refund the over-paid amount? Thanks in advance for all your help.
Andy

bagwell

You should have paid tax on the difference between your new C240 and the value of your trade-in.

example if your C240 was $35000 you'd subtract the trade-in car value of $10000 and only pay sales tax on $25000.


I would call the sales manager directly and have all documentation to support your claim.

good luck

benggolf

perhaps different taxation laws in California. Suggest you check with your local Motor Vehicles Department for a qualified answer.

MarkL

I think you do have to pay tax on the full amount of the new car. As far as taxes go, you have bought that item, and owe taxes on the full value. I believe the trade-in is treated as a deduction, as though it were a deposit so to speak. I don't think your dealer made a mistake -- sorry. (IMO)

young

i don't know if states vary on this, but in Pennsylvania, you definitely don't pay sales tax on the trade-in value. this is useful if you get close to the Luxury tax level too.

Lynn

In Missouri, you pay sales tax on the difference btween the new car price and the trade-in price.

SoCal240/6

In Calif. you pay full sales tax on the purchase price, whether you have a trade in or not makes no difference.

Your salesman did not make a mistake.

Andy

Thank you all for the helpful replies. Yes, since I'm in CA, I did have to pay full sale tax...

bagwell

its worth a try !!

Vic55

Andy, since you purchased your car in California (I am not sure about other states but almost all will be the same except no-sales tax states) you are required to pay sales tax on the cash price of the vehicle. This is before any down payment or trade-in allowances. Your trade-in allowance was basically a down payment and down payments on retail installment contracts are applied after all other factors are input: sales tax, warranties, dealer adds, etc.

Since the dealer is considered the seller he/she doesn't have to pay sales tax on your new car just like you didn't pay sales tax on your trade-in allowance that the dealer gave you. You basically sold your car to them.

Hope this helps out.

Buellwinkle

Is our goverment going to pass the sales tax holiday we've been promised. All of a sudden nobody's talking about it.

pfphipps

Every state is different. In New Mexico, the sales tax is on the difference between the car price and the trade in. In addition, it is at a 3% rate instead of the normal almost 6% rate. It can save quite a bit on buying a car.

Robert G

In Illinois, you only pay sales tax on the net purchase price, net of the trade-in. So, if you are considering selling your old car privately to get a better price, it needs to at least cover the additional sales tax you will pay on the new car because you won't get the deduction for the trade-in.

01BlackE320

New York - You pay sales tax on the difference between the new car and the traded car. Sorry to wake up this 15 yr old thread but I stumbled on it and had no idea this varied between states. My daughter bought her car in Delaware which has no sales tax, but they impose a registration fee that is similar to a sales tax, but a much lower rate. I remember it being a few hundred dollars on a $20k car