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Core charges are trade-in allowances included in the selling price of a part. They are designed to encourage the return of old parts that can be remanufactured. Auto parts sellers
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Core charges are trade-in allowances included in
the selling price of a part. They are designed to encourage the return of old parts that can be remanufactured. Auto parts sellers often include a core charge when they sell parts such as batteries, water pumps, brake shoes, and alternators. Example A seller sells a battery for $54, which includes a $7 core charge. If the buyer trades in his or her old battery, the seller will give the buyer a $7 credit toward the purchase. How tax applies How you calculate the taxable selling price of the part will depend on whether you are selling a new or used part, or a reconditioned or rebuilt part. New or used parts You are liable for tax on the selling price of the new or used part, including the core charge. Tax applies to the core charge because the allowance for the trade-in is considered part of your “payment” for the sale. Example Selling price of new battery $54.00 (includes a $7 core charge) Tax ($54 x 7%) 3.78 Trade-in allowance - 7.00 Total $50.78 Don't blame the retailer. This is part of the Tax and Revenue Code. Since a battery exchange lowers the price, it is considered part of the payment. Sorry - you are still obligated to pay the sales tax.
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