Edmunds Answers

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  • MrShift@Edmunds 12/10/09 11:59 am PST

    You have to pay tax on the rebate, yes, at least in the states you mentioned.

    HERE'S MORE INFO on taxes during a car purchase

    The reason for this is that most states do not consider a rebate the same as a discount.

    Where I live, in California, you do not pay tax on the rebate. But there are only 7 or 8 states that give you this break.


  • morin2 12/10/09 9:36 pm PST

    Other than the fees being charged by the bank, your argument is with the state. We may view a rebate to be a form of discount, but the state doesn't see it that way - its another tax opportunity, no different from the rebate on any consumer product - in which you pay sales tax on the total purchase price before rebate. Another way of viewing it is that you are paying sales tax on a rebate!

    At least on the bright side, your state sales tax on the new car will be deductible on your 2009 federal income tax return.

  • 04350 12/11/09 5:43 am PST

    Contact an Indiana Dept. of Revenue office in Indpls or a regional branch location to confirm how this is supposd to be handled.

    If the Ohio dealership somehow didn't collect enough sales tax upfront from you, when you go to the Indiana BMV, they'll catch it when you register/transfer plates


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