Nuclearranger

Hello,

The state I live in allows for a tax credit of the trade in.

So instead of paying taxes on the $60k Corvette as a whole, I would only have to pay taxes on $40k assuming a $20k trade in value of my last car.


This is all fine and dandy, however, as many of us do, this car is going to be ordered by an out-of-state dealer and courtesy delivered. Does anyone know if I can trade in a car to the courtesy dealer and get the tax credit?

Anyone with any similar experience?

Thanks!

crawfish333

Not in Texas, it may in other states

mpuzach

Your purchase is from the selling dealer, not the delivering dealer. If you worked something out with the delivering dealer, you'd be selling your car to them, not trading it in. The tax break would not apply.

Nuclearranger

Ah.

Well that really puts the aim on a private sale then...

Hopper12

I'd check with your selling dealer just to be certain how it works in your state, as the selling dealer should be taking care of all the tax and paperwork for you. I purchased mine from Kerbeck's (great to deal with BTW) and had it shipped to me in the west. They estimated taxes and I just sent them the $. I didn't do a trade with them, but your dealer will be able to answer the question - or get the answer for you. Good luck and enjoy!!

nmvettec7

Contact your states DMV, as the car will be registered in your state, not in the selling dealers state and see if the tax credit applies to your specific state.

Your best bet is go directly to the source that has the correct answers, and that is your own states DMV.

Why speculate when the info you get may not be accurate, as you have not even provided what state you reside in.

You will probably get so many answers to your question that does not apply. Until you reveal the state of residency it's anybody's guess.

GS1960

Generally DMV will collect the taxes for whatever agency is responsible for sales tax. Contact that agency for the correct answer, then call them back and speak to someone else. If the answers are the same then you are probably ok. If not, send them a letter asking for a written response. With the agency I work for, that becomes written advice and is binding.

HogwildC7

The only way is trading your vehicle with the dealer you are buying car from. If your trade is not in the deal you cant get the tax credit difference.

I know, I just sold mines to get a 2016 and I have to pay the tax on the sales price.

John Cullen

I live in Delaware and sold my Z .I got a C7 from chicago dealer and Delaware gave me the credit.

meyerweb

Best answer. Asking for tax advice on a car forum is like asking what car to buy on a forum dedicated to Barney the dinosaur.

mpuzach

The key is that the vehicle being traded in needs to be traded to the selling dealer, not the delivering dealer (if they're not the same). Even then, the sales tax credit is only given if the buyer lives in a state where tax is paid on the difference and not the new car's selling price.

nmvettec7

mpuzach:

In most cases this is 100% correct. Each state has different policies and taxation statues and rules.

The OP Nuclearranger has not provided any information of what state he resides in. So any post by any CF member is a moot point or comment.

As CF member Meyerweb stated above it makes no sense to seek "tax advice" on a public forum such as this.

The OP needs to spend time completing his own due diligence and research to understand the taxation in his particular situation & state and educate himself.

phileaglesfan

Check with your DMV. It really varies by state a lot.

gbjerke

Am sure that every state's sales tax is based on bottom line price.
i.e., 60k purchase, 20k trade in equals 40k on which you would pay the sales tax.
As to where you pay this tax depends on the state. My last 4 Vettes have all been out of state purchases. My local tax rate is 6.25%. Michigan collected 5% and I paid the additional 1.25% when I returned to Illinois.
Minnesota collected no tax so paid the full boat back here. New Jersey, not sure if they collected anything but never paid more than my 6.25 rate.
Last one was Rhode Island....no tax collected. Paid the full boat here.
With all that being said, it is clear to me that selling your Vette rather than trading it is the best route.
Trading in will get you a lot less $$$ which will more than cover your "tax savings".
Don't forget the sales tax you pay could well help you come income tax filing time...gotta love deductions ya know.

meyerweb

Nothing personal, but this is why I suggested asking for tax advice on a car forum is a fool's game. What you are "sure" of is simply wrong. In Virginia you pay tax on the sales price of the car, period. Trade-ins have no impact at all. I wouldn't presume to assume that the other 49 states are all the same.

mpuzach

The above is exactly correct.

RedZ

I bought my car from MacMulkin in NH where there is no sales tax and had it courtesy delivered to WA where there is sales tax.

The dealer did not collect any sales tax for two reasons. 1) they didn't sell it to me, and 2) Technically speaking I needed to pay a "use tax" not sales tax.

The use tax rate in washington is the same rate as your local sales tax rate at your home address (for me that was 1% less than courtesy dealer).

I found all this info online from official sources (state websites).

So at least in WA, there is no way to get the tax "credit" unless you trade it in with the selling dealer.

Good luck.

Vetteman Jack

In Missouri you pay your sales tax on the bottom line price of the car - which includes whatever you get as a trade in for your car. For example, if you get $15K for your trade in and the car was priced at $30K, you would pay taxes on the $15K difference.

Globeman

At least one forum dealer will allow you to pass the trade-in title through them to save the sales tax.

You agree on a price with the buyer. The forum dealer buys your trade-in from you then immediately transfers the title to your buyer for the same price. They charge $500 for this service. Your invoice shows the trade-in so you pay sales tax on the net price. See if your dealers are willing to do this.

gbjerke

My bad I guess. Also surprises me.
Dare I suggest that 40+ states tax the difference?