Tax on Incentives - Chevy Malibu Forum: Chevrolet Malibu Forums
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post #1 of 12 (permalink) Old 04-27-2010, 05:57 PM Thread Starter
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Tax on Incentives

I got the $3,000 incentive when I bought my car. One thing bothered me. They charged me tax on the incentive. I didn't pay the extra $3K, why do I have to pay tax on it? It just didn't seem to make sense. I calculated how much the tax should have been and they were charging me about $260 more than what I expected. That's when I found out that I was responsible for the tax on the incentive.

Does this sound right?
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post #2 of 12 (permalink) Old 04-27-2010, 06:51 PM
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Re: Tax on Incentives

Doesn't surprise me, they'll do just about anything to squeeze some more $ out of ya when your buying.


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post #3 of 12 (permalink) Old 04-27-2010, 06:51 PM
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Re: Tax on Incentives

That is 8.67%, so if that is how much your sales taxes are in your area then that sounds exactly right.
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post #4 of 12 (permalink) Old 04-27-2010, 06:53 PM
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Re: Tax on Incentives

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Originally Posted by Richard View Post
I got the $3,000 incentive when I bought my car. One thing bothered me. They charged me tax on the incentive. I didn't pay the extra $3K, why do I have to pay tax on it? It just didn't seem to make sense. I calculated how much the tax should have been and they were charging me about $260 more than what I expected. That's when I found out that I was responsible for the tax on the incentive.

Does this sound right?
Yup, the tax is calculated after the trade-in but before the incentives are subtracted. The finance guy should have explained it to you. How are you figuring $260? Does your state have close to 9% sales tax? Wow.
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post #5 of 12 (permalink) Old 04-28-2010, 03:50 AM
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Re: Tax on Incentives

Depends on the state laws. Some tax prior to incentive, some tax after the incentive.

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post #6 of 12 (permalink) Old 04-29-2010, 10:50 AM Thread Starter
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Re: Tax on Incentives

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Originally Posted by Starship View Post
Yup, the tax is calculated after the trade-in but before the incentives are subtracted. The finance guy should have explained it to you. How are you figuring $260? Does your state have close to 9% sales tax? Wow.
Yes, the Sales Tax Rate in NYC is 8.875%. The amount I paid was actually $266.25 for tax on the Incentive.
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post #7 of 12 (permalink) Old 04-29-2010, 11:21 AM
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Re: Tax on Incentives

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Yes, the Sales Tax Rate in NYC is 8.875%. The amount I paid was actually $266.25 for tax on the Incentive.
Ahhh, NY sales tax. I sure don't miss that. I lived in Suffolk county and we had 8.625%. Now I have 7% in FL.




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post #8 of 12 (permalink) Old 04-29-2010, 03:52 PM
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Re: Tax on Incentives

Moved to SC from Pa where it was 6%. Here in SC it's also 6%, however, there is a $300 cap. Can't beat it.

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post #9 of 12 (permalink) Old 07-07-2010, 10:38 AM
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Re: Tax on Incentives

Look at the bright side. When the domestic automakers first started using rebates in the late 70s/early 80s people used to get charged Federal Income Tax on the rebate even though they never saw the money. The government required the automakers to send a 1099 to each purchaser that received a rebate. After some griping things were changed.

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post #10 of 12 (permalink) Old 08-19-2010, 05:02 AM
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Re: Tax on Incentives

If you check, even when you go to places like Costco and you use their coupon, they charge tax on the original before coupon price. States are realizing they are loosing tax revenue.
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