Comments for The Sales Tax Connection

Comment on Louisiana – New Resale Certificates (again) by LY

LY — Fri, 23 Oct 2009 21:54:19 +0000

From a RESELLER: What about the local parishes? Are they all (64 of them) accepting the new form from the state as proof or do we still need to have a separate parish issued certificate/blanket certificate that you fill out yourself?

Comment on New York City – Sales Tax Changes 8/1/09 (Correction) by Ramon

Ramon — Mon, 05 Oct 2009 14:35:23 +0000

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Comment on Cash For Clunkers – Taxable or Not? by Sue

Sue — Fri, 18 Sep 2009 02:09:55 +0000

For your list, I looked up Rhode Island’s tax rule regarding C4C and it appears that RI laws allow the taxation of the sales price BEFORE the deduction of the C4C credit. Therefore they ARE taxing the C4C credit. The text is below so you can check if I read it right! Thanks for the great info. We paid tax on our $4500 credit, but since our trade in was only worth $800 and we’ll get to deduct the sales tax on our Fed. form, it was still worth it for us.

Rhode Island General Law 44-18-12(v)(C) states that “sales price” shall include consideration received by the seller from third parties if the seller receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale. The credit received by the purchaser at the time of purchase or lease of new qualifying motor vehicle therefore shall be included in the sale price subject to tax.

Comment on Cash For Clunkers – Taxable or Not? by Red Oscar

Red Oscar — Thu, 17 Sep 2009 23:13:54 +0000

Dale……..I too live in Kentucky and purchased a new Dodge in the “Cash for Clunkers” program. Like you we received a $3500 CARS credit and $5000 Cash Back from Dodge. Our dealer only charged us Kentucky Use Tax on the negotiated price of the vehicle after all discounts/credits. In fact, the salesman reduced the Use Tax on the contract when he learned that tax was not to be charged on the CARS credit, with no input from us. We made our purchase on July 24th when the program rules were just made public. I feel our dealer was obviously trying to play very correctly to all the rules in this CARS program. I would be pretty upset if I learned we had overpaid for use tax on our vehicle.

Comment on Cash For Clunkers – Taxable or Not? by Dale Large

Dale Large — Mon, 07 Sep 2009 02:40:53 +0000

I live in Ky also and did a clunker deal with Dodge. I got 3500 off from the clunkers and 5000 from Dodge. I checked around and it seemed most places were charging 90% of sticker or so forth. The toyota in my area that had sold about 200 vehicles told me that it was 90% of sticker with nothing off for the clunker or rebates.

I finally found a clerk’s office that believed the 8500 in my case should be took off the purchase price. From my understanding, this was the correct way and I believe it was also. I just believe that most people ended up paying a lot more than they should have. Probably some dealers knew better but made some extra profit.

If You go to the Ky website and read this: “The Department has determined that the amount of the voucher paid directly to the car dealer from the National Highway Traffic Safety Administration (NHTSA) constitutes a dealer rebate for motor vehicle usage tax calculation purposes. Therefore, the amount of this federal credit applied to reduce the new car buyer’s purchase price is not part of “total consideration” that is subject to the usage tax”

It sounds like to me that the clunker value isn’t included and dealer rebates also. Where I transfered my vehicle, they said the rebate wasn’t included if the amount was took off the top at the dealer. In other words, If you pay so much and get a rebate check later, it is not excluded from tax. But if they take the price of the vehicle minus clunker and instant rebates at the dealership, then You only pay tax on what you paid.

Hope this helps

Comment on Cash For Clunkers – Taxable or Not? by » Cash for Clunkers Tax Rules | Prime Time Money

» Cash for Clunkers Tax Rules | Prime Time Money — Fri, 28 Aug 2009 17:59:32 +0000

[...] more details on these State’s tax rules and links to their authorities’ websites, see Cash for Clunkers: Taxable or Not? If your State isn’t included above, it’s likely they haven’t communicated their [...]

Comment on Cash For Clunkers – Taxable or Not? by C4C Rebates Taxable? - PriusChat Forums

C4C Rebates Taxable? - PriusChat Forums — Fri, 28 Aug 2009 15:53:55 +0000

[...] Tax is Sales Tax. It is hard to get around it. This is a great post. It has info on many states. Cash For Clunkers – Taxable or Not? The Sales Tax Connection Also, if you did not do the research to figure this out – or look at the paperwork when you [...]

Comment on SD – Use Self-Storage services?? GET YOUR REFUND!! by SD – Self storage in the last 3 years? Get Your Refund! « The Sales Tax Connection

Wed, 19 Aug 2009 14:42:38 +0000

[...] Posted by salestax on August 19, 2009 Some time ago, two very brave business owners subjected themselves to sales tax statute scrutinization of their mini/self-storage business. These brave souls won their case almost a year ago and it now stands that basic Mini/Self storage services are not taxable in SD anymore. Further, SD is allowing any customers who had been charged tax on these services to go back to the storage business and request a sales tax refund (See my previous report). [...]

Comment on Cash For Clunkers – Taxable or Not? by salestax

salestax — Mon, 17 Aug 2009 18:53:23 +0000

Hi Denise,

This is a real long explanation, the way I see it, so I replied to your comment privately. However, for the good of readership, to summarize:

KY – doesn’t typically have a sales tax on vehicles, instead has a Motor Vehicle Usage Tax (MVUT)
KY – will reduce the Total Consideration which is taxable by the amount of the CARS rebate
KY – does not reduce the Total Consideration taxable by the amount of the 3rd party reimbursement from Ford Motor Company.
KY – has 2 options for calculating tax base on MVUT: a. 90% of MSRP (which I think should be reduced by the CARS amount) or b. Total Consideration attested to on a special form (71A100). Still wouldn’t reduce the tax base by the extra $4500 rebate. I think the purpose of option “b” is for when dealers give their own incentives or dollars off that are more than 10% of the vehicle MSRP and aren’t reimbursed by a 3rd party to do so.

I hope this helps!

Comment on Cash For Clunkers – Taxable or Not? by denise wagner

denise wagner — Sat, 15 Aug 2009 14:38:29 +0000

We bought a truck and are in a dispute say we paid 29,000.00 they should deduct the 4500. cash clunker, and the 4500.00 ford rebates they offer then tax us at 6% on 20,000.00 CORRECT? That is the way KY legislative office told me but, Ford said they have done 90 of these and tax on 90% of msrp? Ky said wrong. We are argued and they did it our way but had us sign a paper saying we would pay them back if we were wrong. Your view would be greatly appreciated.

Denise