Trade in-Tax Question!
#1
Trade in-Tax Question!
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!
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!
#3
Race Director
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.
#4
#5
Melting Slicks
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!!
#6
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.
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.
#7
Racer
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.
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.
#8
Melting Slicks
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.
I know, I just sold mines to get a 2016 and I have to pay the tax on the sales price.
#11
Race Director
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.
#12
Originally Posted by [B
mpuzach[/B];1590363451]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.
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.
#14
Racer
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 $$$ which will more than cover your "tax savings".
Don't forget the sales tax you pay could well help you come income tax filing time...gotta love deductions ya know.
i.e., 60k purchase, 20k trade in equals 40k on which you would pay the sales tax.
As to where you pay this tax depends on the state. My last 4 Vettes have all been out of state purchases. My local tax rate is 6.25%. Michigan collected 5% and I paid the additional 1.25% when I returned to Illinois.
Minnesota collected no tax so paid the full boat back here. New Jersey, not sure if they collected anything but never paid more than my 6.25 rate.
Last one was Rhode Island....no tax collected. Paid the full boat here.
With all that being said, it is clear to me that selling your Vette rather than trading it is the best route.
Trading in will get you a lot less $$$ 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.
#15
Safety Car
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.
#16
Race Director
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.
#17
Instructor
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.
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.
#18
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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.
#19
Pro
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.
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.
#20
Racer
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.
Dare I suggest that 40+ states tax the difference?