Tax Refund?

February 13, 2005 8:51 AM

AccountingFilter:
I purchase a car for 10,000. with a $1000 rebate
The state levies a 5% sales tax of $500 . Am I not entitled to to a tax refund of $100 ?
My good buddy Google is uncharacteristically mum about this query.
posted by Fupped Duck to law & government (7 comments total)

It varies from state to state. What state are you in?
posted by stupidsexyFlanders at 9:08 AM on February 13, 2005

And aren't you talking about $50, not $100? Or am I missing something?
posted by jaysus chris at 9:18 AM on February 13, 2005

In NJ, rebates are taxable. Even if the purchase price is less the rebate, you have to pay sales tax on the rebate, so it's a wash. And what jaysus chris said.
posted by nj_subgenius at 9:28 AM on February 13, 2005

I would think not.
The sale price of the car is $10,000. You are taxed on the sale price. The rebate is a special deal you have with the manufacturer to send you money after the fact, it is not a discount on the sale price.
posted by falconred at 9:41 AM on February 13, 2005

If it is in New York, they helpfully have an answer on their website:

"New York State and local sales tax is computed on the sales price prior to deducting the manufacturer’s rebate. Even though the price paid by the consumer is reduced by the amount of the rebate, the selling price paid to the retailer is not. In effect, the manufacturer is subsidizing the consumer’s purchase."
posted by smackfu at 11:06 AM on February 13, 2005

Note that if you itemize your taxes this year, you can deduct the sales tax you paid on the car. So all is not lost.
posted by zsazsa at 11:07 AM on February 13, 2005

You wouldn't be entitled to one in Michigan either.

Here's a different example that people find even more frustrating. Years ago I worked in the auto dept of a retailer, where I had to explain to people that if they bought a new battery and later returned their old one to get the $6 core charge back, they could not get back the sales tax on that core charge. That was the law. Whereas, if they had brought the old one in at the same time they bought the new one, there was no core charge and therefore no sales tax on it.
posted by pmurray63 at 4:03 PM on February 13, 2005