Do you have to pay taxes on the rebate you receive when you buy or lease a new car?

Question

Is there a tax on the rebate? Do Indiana residents pay tax on the sticker price or the adjusted price?

Answer 1

You don't pay taxes on the actual rebate.  However, the taxes are based on the price of the vehicle before the rebate.

For example, if you agree to purchase a car for $21,000 and the rebate is $2,000, the taxes are you pay are based on the $21,000.

The rebate is applied after tax, title, license, doc fee, etc.

Answer 2

As I understand it (at least here in NYS), that is your money you are getting back. So it is NOT income - so no income tax is assessed.

Good Luck...

Answer 3

you only pay tax on what you paid for the car and that's after all rebates and discounts you are given. if you trade a car in some states will tax you before the trade and others after the trade but when all figures are set that that is what you pay tax on.