Vehicle Sales Tax question

['01LS1]

Just double checking what I think is right.

 

If you buy a vehicle at a dealership & use a offer code that you may have found online or gm credit card dollars, is the taxable dollar amount before or after that money is applied.

 

Example, dealer offers a vehicle at a final selling price of $30,000.

Customer applies 2,000 in credits mentioned above.

 

Taxable dollar amount should be based on 28,000, or actual transaction amount, correct?

 

Have seen some games over the years, just clarifying.

 

[SoCalChris]

The tax should be based on the full sale amount, before any credits. Technically, the truck sold for $30k, and you applied $2k in credits towards that. That's why when you get a "free" cell phone, you are charged tax based on the full price of the phone. You technically bought it for the full price, and then the seller applied a credit towards the purchase for the full amount, so you still get stuck with the tax for the full amount.

 

At least that's how it is in California. I've got a seller's permit here for my business.

[Z45]

It all depends on your state tax laws but as mentioned typically all credits or rebates are treated as your money for tax purposes and cannot be used to reduce taxes owed.

 

 

When it comes to taxes, to avoid is legal, to evade is not.

['01LS1]

Appreciate the info guys, makes sense.