Trade-In Tax Credit????

[4runnerTRDPR0]

Hopefully somebody can give me some feedback or experience in the matter. I assumed when I picked up my vehicle that I would only pay sales tax(aka use tax) on the difference of the vehicle's sales price and my trade in allowance????

I bought the vehicle in Vermont and brought it back here to NY to the DMV to get my registration done and pay the taxes. They are telling me I owe taxes on the full price of the vehicle?? Maybe it sucks for me because I got it in another state. Has anybody been through this? Am I dealing with DMV workers that don't know or care about me paying the tax? Also, going to another DMV tomorrow to see if its the same issue, if it is I will just register through the state of hawaii and just pay 4% to them- which is still $300 more than what I thought I would pay(Im military and have access to out of state resident registration process there)

My situation:
Vehicle Sale Price: $42,195
Doc Fee: $200.00
Total Price: $42,395.00

Trade in Allowance: $27,500
Balance owed on trade in: $22,475

$42,395-$27,500= $14,895 this is the only part i thought was taxable??????

If I am wrong, is it because I still had a Lien on my trade in so it negated my tax benefit????

I appreciated the feedback. And if I am wrong, whatever..... lessoned learned....

 

[bimrunner]

Hopefully somebody can give me some feedback or experience in the matter. I assumed when I picked up my vehicle that I would only pay sales tax(aka use tax) on the difference of the vehicle's sales price and my trade in allowance????

I bought the vehicle in Vermont and brought it back here to NY to the DMV to get my registration done and pay the taxes. They are telling me I owe taxes on the full price of the vehicle?? Maybe it sucks for me because I got it in another state. Has anybody been through this? Am I dealing with DMV workers that don't know or care about me paying the tax? Also, going to another DMV tomorrow to see if its the same issue, if it is I will just register through the state of hawaii and just pay 4% to them- which is still $300 more than what I thought I would pay(Im military and have access to out of state resident registration process there)

My situation:
Vehicle Sale Price: $42,195
Doc Fee: $200.00
Total Price: $42,395.00

Trade in Allowance: $27,500
Balance owed on trade in: $22,475

$42,395-$27,500= $14,895 this is the only part i thought was taxable??????

If I am wrong, is it because I still had a Lien on my trade in so it negated my tax benefit????

I appreciated the feedback. And if I am wrong, whatever..... lessoned learned....

Unfortunately sales tax is on the total of the purchase. Your purchase was $42,395. Your trade in was to offset the price of the purchase which is the $42k plus sales tax. So yeah, sales tax on the whole kitty. Lesson learned! Enjoy the new ride! Sales tax doesn't follow the rig and whoever buys your trade it will pay sales tax on that too... taxes... oh, I think I'll stop there.

 

[4runnerTRDPR0]

[MENTION=89562]bimrunner[/MENTION] I am tracking the following states that doesn't have the trade in tax credit rule:
California
District of Columbia
Hawaii
Kentucky
Maryland
Michigan
Montana
Virginia

I noticed you are from NorCal. So california is just one of those states that have to pay full taxes, whether or not you have a trade in. I've bought multiple vehicles in the past and all of them were only taxed on the difference, so I saved a lot of money. But, this sale is different because its my first time buying out of state then bringing it back to NY.

Also, heading over to FT irwin California in September/October timeframe. Should be fun........

 

[bimrunner]

[MENTION=89562]bimrunner[/MENTION] I am tracking the following states that doesn't have the trade in tax credit rule:
California
District of Columbia
Hawaii
Kentucky
Maryland
Michigan
Montana
Virginia

I noticed you are from NorCal. So california is just one of those states that have to pay full taxes, whether or not you have a trade in. I've bought multiple vehicles in the past and all of them were only taxed on the difference, so I saved a lot of money. But, this sale is different because its my first time buying out of state then bringing it back to NY.

Also, heading over to FT irwin California in September/October timeframe. Should be fun........

Ahh. I should have read more carefully. You are going to get some nice desert running in being down in Irwin! Spring in Mojavi will be nice though!

 

[vlad drac]

[MENTION=89562]bimrunner[/MENTION] I am tracking the following states that doesn't have the trade in tax credit rule:
California
District of Columbia
Hawaii
Kentucky
Maryland
Michigan
Montana
Virginia

I noticed you are from NorCal. So california is just one of those states that have to pay full taxes, whether or not you have a trade in. I've bought multiple vehicles in the past and all of them were only taxed on the difference, so I saved a lot of money. But, this sale is different because its my first time buying out of state then bringing it back to NY.

Also, heading over to FT irwin California in September/October timeframe. Should be fun........

This is incorrect. In MD, you only pay taxes on the difference between the purchase price and your trade. I know I just did it 3 months ago.

I'm a little confused. Did the VT dealer collect any sales tax?

 

[southman_70]

Hopefully somebody can give me some feedback or experience in the matter. I assumed when I picked up my vehicle that I would only pay sales tax(aka use tax) on the difference of the vehicle's sales price and my trade in allowance????

I bought the vehicle in Vermont and brought it back here to NY to the DMV to get my registration done and pay the taxes. They are telling me I owe taxes on the full price of the vehicle?? Maybe it sucks for me because I got it in another state. Has anybody been through this? Am I dealing with DMV workers that don't know or care about me paying the tax? Also, going to another DMV tomorrow to see if its the same issue, if it is I will just register through the state of hawaii and just pay 4% to them- which is still $300 more than what I thought I would pay(Im military and have access to out of state resident registration process there)

My situation:
Vehicle Sale Price: $42,195
Doc Fee: $200.00
Total Price: $42,395.00

Trade in Allowance: $27,500
Balance owed on trade in: $22,475

$42,395-$27,500= $14,895 this is the only part i thought was taxable??????

If I am wrong, is it because I still had a Lien on my trade in so it negated my tax benefit????

I appreciated the feedback. And if I am wrong, whatever..... lessoned learned....

I had a similar situation. I bought a car in SC and registered it in Georgia. I got a letter from the tax office and went to see what was the issue. I didn't know about the tax issue I was young and in the army. they explained that even though I bought the vehicle in SC I had to pay Ga taxes. The rep was going to charge me the full amount but was inform they can only charge the difference between the states. So I ended up paying only .2 or something to that effect. Any situation I ordered a car in S Korea a volvo and got stationed in TX but I did a fast one and registered the car in the USVI "no sale tax" only paid $250 lol. In Texas you only pay taxes on the difference of the trade because if you pay the whole amount of the vehicle they are double dipping because your trade was an asset that was already taxed.

 

[Eagle]

Strictly speaking, Use Tax is different than Sales Tax... but they can be thought of as twins. Use Tax will typically apply when you purchase something out-of-state that would have been subject to Sales Tax if it had been purchased in-state. That sounds like your situation.

NYS only charges Sales Tax on the purchase price that exceeds the trade-in value. For you, that would be the $14,695 difference between the $42,195 new vehicle price and the $27,500 trade in credit (the $200 doc fee may or may not be included in the purchase price number). See: Taxable Receipt - How Discounts, Trade-Ins, and Additional Charges Affect Sales Tax. The Use Tax should be the amount of NY Sales Tax that would have been charged if you purchased the vehicle in NY instead of VT... i.e., the tax on $14,695 difference between purchase price and trade in.

Of course, my saying so means nothing and you have to deal with the DTF or DMV.

 

[4runnerTRDPR0]

This is incorrect. In MD, you only pay taxes on the difference between the purchase price and your trade. I know I just did it 3 months ago.

I'm a little confused. Did the VT dealer collect any sales tax?

no the dealer did not collect any taxes..... I just went there to pick the vehicle up then register and pay taxes here in NY(there was no TRD PRO in the whole state of NY for sale so i had to go out of state). I am confused also, If anything I'll get word by tomorrow from another DMV office and see if its a continuing trend. I will then be forced to use my plan B: and just chalk up a 4% sales tax through the state of hawaii (which is still a very good price by any standard)

 

[Blitzkrieg]

Be happy. Here in CO they just bend you over. Not even a kiss first.

My RTD tax on my new 4Runner was $365 and I haven't been on a bus in 20 years LOL.

 

[4runnerTRDPR0]

Strictly speaking, Use Tax is different than Sales Tax... but they can be thought of as twins. Use Tax will typically apply when you purchase something out-of-state that would have been subject to Sales Tax if it had been purchased in-state. That sounds like your situation.

NYS only charges Sales Tax on the purchase price that exceeds the trade-in value. For you, that would be the $14,695 difference between the $42,195 new vehicle price and the $27,500 trade in credit (the $200 doc fee may or may not be included in the purchase price number). See: Taxable Receipt - How Discounts, Trade-Ins, and Additional Charges Affect Sales Tax. The Use Tax should be the amount of NY Sales Tax that would have been charged if you purchased the vehicle in NY instead of VT... i.e., the tax on $14,695 difference between purchase price and trade in.

Of course, my saying so means nothing and you have to deal with the DTF or DMV.

I am glad we are on the same sheet of music. She went on to tell me the reason was because I still owed on the trade in so it negated that credit? I looked everywhere and have not found 1 viable reference to that claim. Went back to the office a second time showing them straight from the NY website about trade in allowance and still couldn't budge them (they looked irritated I did that) .

So its either Im dead wrong on the issue and its different for an out of state buy, or I've irritated them to the point they are in the position to charge me what they deem appropriate...

Ill put an update tomorrow when I go to another DMV

 

[Blitzkrieg]

I know here in Colorado it's based on the net worth of your trade in. In other words, if you owe $10K on the vehicle and the dealer gives you $10K for it, your net trade in value is $0.

I paid cash for my 2002 and when I traded it in I netted $xxxx. That came off the top of the sales price of the new truck when it came to taxes. Had I owed $xxxx it zero's itself back out and you are taxed on it.

Either way they ream you like the new guy on the prison block. My plates alone were $870.

 

[THEROK]

Totally sucks but you know the saying. Death and taxes.

California state was nailing me nearly $5k to reg my truck to collect the full sales tax on full value of my $80k whip sans trade in credit in the friendlier state. Total bs. Even after a year they are still trying to collect. Ridiculous. Eat a d!ck.

 

[CatskillsRunner]

Ny taxes

Nope, the person you spoke to at the DMV is wrong. You pay on the difference in NYS. Just did this 2 months ago. Traded two trucks for one truck, we owed the same amount, paid no taxes at all. It makes no difference whether you have a loan. I dont even understand that. Its not like NYS has gotten sales tax every month from your loan payment and has had to wait for it.

Go back and talk to someone who knows what the hell they are talking about.

 

[FDR]

Strictly speaking, Use Tax is different than Sales Tax... but they can be thought of as twins. Use Tax will typically apply when you purchase something out-of-state that would have been subject to Sales Tax if it had been purchased in-state. That sounds like your situation.

NYS only charges Sales Tax on the purchase price that exceeds the trade-in value. For you, that would be the $14,695 difference between the $42,195 new vehicle price and the $27,500 trade in credit (the $200 doc fee may or may not be included in the purchase price number). See: Taxable Receipt - How Discounts, Trade-Ins, and Additional Charges Affect Sales Tax. The Use Tax should be the amount of NY Sales Tax that would have been charged if you purchased the vehicle in NY instead of VT... i.e., the tax on $14,695 difference between purchase price and trade in.

Of course, my saying so means nothing and you have to deal with the DTF or DMV.

This is exactly correct. In NY you are only responsible for the taxes on the difference between the purchase price of your new TRD Pro and the value the dealer in VT assigned to your trade vehicle. The payoff amount of your trade vehicle has nothing to do with the sales tax due. It sounds like you need to talk to a supervisor at the DMV office when you go back. I know it's painful to deal with them, but don't take no for an answer on this one.

 

[4runnerTRDPR0]

I know here in Colorado it's based on the net worth of your trade in. In other words, if you owe $10K on the vehicle and the dealer gives you $10K for it, your net trade in value is $0.

I paid cash for my 2002 and when I traded it in I netted $xxxx. That came off the top of the sales price of the new truck when it came to taxes. Had I owed $xxxx it zero's itself back out and you are taxed on it.

Either way they ream you like the new guy on the prison block. My plates alone were $870.

Now that would make sense to my situation......... if that is how they are calculating it... then I could see me paying more taxes then what I initially thought. The difference between my Trade in allowance and "What I owed on the trade in":$27,500-$22,475= $5025..... So $42,195-$5025 = $37,170 taxable ...... Thanks, you've painted a clearer picture for me with trade in allowance VS Net worth Allowance, maybe thats what she was trying to explain....Hoping I'm still right in my original thinking though....

 

[aweaver65]

[MENTION=89562]bimrunner[/MENTION] I am tracking the following states that doesn't have the trade in tax credit rule:
California
District of Columbia
Hawaii
Kentucky
Maryland
Michigan
Montana
Virginia

I noticed you are from NorCal. So california is just one of those states that have to pay full taxes, whether or not you have a trade in. I've bought multiple vehicles in the past and all of them were only taxed on the difference, so I saved a lot of money. But, this sale is different because its my first time buying out of state then bringing it back to NY.

Also, heading over to FT irwin California in September/October timeframe. Should be fun........

Add Oklahoma to that list. You pay full sales tax here on the purchase price of a new vehicle. I've been through several in the past two years and paid between $1200 and $1800 on every single one. I'd never encountered that before. I've lived most of my life in Florida and they always include sales tax in the financing and you absolutely get the value of your trade knocked off of the purchase price there. I've since purchased two in Arkansas, no dealer financing of taxes there and several here in Tulsa. Same thing and taxes here are calculated on the full selling price. In my case that really bites.

 

[4runnerTRDPR0]

Add Oklahoma to that list. You pay full sales tax here on the purchase price of a new vehicle. I've been through several in the past two years and paid between $1200 and $1800 on every single one. I'd never encountered that before. I've lived most of my life in Florida and they always include sales tax in the financing and you absolutely get the value of your trade knocked off of the purchase price there. I've since purchased two in Arkansas, no dealer financing of taxes there and several here in Tulsa. Same thing and taxes here are calculated on the full selling price. In my case that really bites.

[MENTION=119370]aweaver65[/MENTION] I believe oregon was one of the states that charge $0 for taxes on automobile purchases if I'm not mistaken, I think I read that some where..... Really opens your eyes to what states are definitely reaming you in the behind..... California even taxes for online purchases, where most states don't tax online unless they have a store BASED IN the state*food for thought*.... but yeah, Murica!

 

[aweaver65]

Death & Taxes

[MENTION=119370]aweaver65[/MENTION] I believe oregon was one of the states that charge $0 for taxes on automobile purchases if I'm not mistaken, I think I read that some where..... Really opens your eyes to what states are definitely reaming you in the behind..... California even taxes for online purchases, where most states don't tax online unless they have a store BASED IN the state*food for thought*.... but yeah, Murica!

Yep, between State Tax, Income Tax, SS Tax, Unemployment Tax, Medicare Tax, Property Tax, and Sales Tax for last year, I paid DOUBLE my monthly house payment every month on average... Makes me a little more than frustrated...

I now make about 40% more than I did about 10 or 12 years ago gross, but I bring home maybe 20% more than I did then, if that..

 

[bimrunner]

[MENTION=119370]aweaver65[/MENTION] I believe oregon was one of the states that charge $0 for taxes on automobile purchases if I'm not mistaken, I think I read that some where..... Really opens your eyes to what states are definitely reaming you in the behind..... California even taxes for online purchases, where most states don't tax online unless they have a store BASED IN the state*food for thought*.... but yeah, Murica!

Yep, we bend over here in CA and then we are expected to say thanks afterward. 8.75% sales tax here.

 

[4Surfin]

that is a long list of commi states right there! we pay the difference in FL, we all carry guns and have no state tax..... of course that is why there are a bunch of illegals here but nonetheless