tax break on trade in?

wilsonp · 08-19-2010, 06:05 PM

You were so close:
What Fees Should You Pay?

Looks like New York has a Y in the trade-in column for taxing trade-ins, so out of luck just like me!

Of course, the fact that the Virginia line appears completely wrong is a bit worrisome... maybe you should just check the NY DMV site.

Checking further, looks like they might be wrong for New York as well:
http://www.tax.state.ny.us/pubs_and_...le_receipt.htm

says no:

Quote:

As a seller, when you accept something as a trade-in and reduce your selling price accordingly, sales tax is only due on the reduced price after subtracting the credit for the trade-in, as long as you plan to resell the trade-in item. This is most common with sales and purchases of motor vehicles.

Example: A customer comes into your car dealership and decides to buy a vehicle from you for $22,500. You agree to take the customer’s current vehicle as a trade-in and give him a $4,500 credit for his old vehicle. You would calculate the taxable amount of the sale as follows:

Original price $22,500
Trade-in -4,500
Sale price subject to tax 18,000

Again, this is only true as long as you plan to resell the vehicle being traded in, and the trade-in allowance is being applied as partial payment for the item being purchased.

im89 · 08-19-2010, 06:35 PM

"If there is a "Y" in the "Trade-In Sales Tax" column of your state, you are only taxed on the difference between the new car and your trade-in. So, if your new car costs $20,000 and you are getting $7,000 for your trade-in, you will be taxed on the difference, or $13,000. If sales tax in your state is 8 percent, this will save you $560. "

accoriding to this a "y" means there is a tax break since you only pay the difference in on the purchase. i dont know am i reading wrong?

Lee123 · 08-19-2010, 08:16 PM

The quote above from the NY state tax site (in the post by wilsonp) states that you only pay tax on the difference. I believe you can count on that site for accurate info.

08-19-2010, 08:16 PM	#3 (permalink)
Lee123 Base Member Join Date: Apr 2010 Location: Phoenix Posts: 84 Drives: 2010 370Z Roadster Rep Power: 16	Tax only on the difference according to NY state tax site The quote above from the NY state tax site (in the post by wilsonp) states that you only pay tax on the difference. I believe you can count on that site for accurate info.

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08-19-2010, 06:35 PM	#2 (permalink)
im89 Base Member Join Date: Jul 2010 Location: NY Posts: 148 Drives: 2010 370z PW 7SP Rep Power: 16	"If there is a "Y" in the "Trade-In Sales Tax" column of your state, you are only taxed on the difference between the new car and your trade-in. So, if your new car costs $20,000 and you are getting $7,000 for your trade-in, you will be taxed on the difference, or $13,000. If sales tax in your state is 8 percent, this will save you $560. " accoriding to this a "y" means there is a tax break since you only pay the difference in on the purchase. i dont know am i reading wrong?