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Shouldn't Tesla deduct my Trade-in before taxes are calculated?
- Thread starter Investor9872
- Start date
42 States have some sort of tax credit or deduction on new cars with trade in
States without Tax Benefit
The state of Oregon has no sales tax, so if you live in that state and buy a car, the tax calculation is easy -- zero. In seven other states, there is no credit or sales tax reduction when you trade in a car. Those states are California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia. If you live in one of these states you calculate sales tax by multiplying the full new car purchase price times the local sales tax rate.
Calculating Sales Tax for a New Car Purchase With a Trade-In
In 42 out of the 50 states, when you trade in a car to purchase a new one, you will get some sort of sales tax credit on the value of your trade. The amount of tax you pay depends on what you are buying, what your trade is worth and your state's sales tax policies. The dealer will calculate and...
finance.zacks.com
Ok well at the very least your post was off topic since this is a legal requirement and not a Tesla customer support issue.
No, Musk is a brilliant man and a spoiled man child too. "Also, your order page lists the phone number that you call and ask anything." No, not 7 moths ago
"The man" is the only reason that you are driving your Tesla." so I should bow down to him, is that right? He is a massive character flaw..
If you do the trade when placing the order they will calculate taxes correctly. If you put the trade on later, they just subtract trade from total. They will fix it a few days before your delivery. They said they would fix it and they did on mine. It’s stupid it works that way but that’s how it is.
This absolutely does not matter, as its your location, not the location you pick up the car, that determines taxes. Otherwise everyone on the west coast would fly to Oregon to buy cars since oregon doesnt have sales tax.
I am going to make a general statement here that the off topic comments should cease. Along with this comment, I will say that, in general, moderators will generally give escalating actions if they need to take action on a member who has already been subject to action previously.
I am being vague and speaking generally on purpose, but if this applies to you (previous moderation action) you are already aware of that.
I am being vague and speaking generally on purpose, but if this applies to you (previous moderation action) you are already aware of that.
ZenRockGarden
Active Member
No, in California there is no such thing as "deducting trade in value" off the taxes on a new car purchase. All car sales of all kinds are taxed in full with only narrow exceptions for gifting to immediate family member.
It's not a very fair or smart system, but it is the system, and has nothing to do with Tesla. All cars work this way
It's not a very fair or smart system, but it is the system, and has nothing to do with Tesla. All cars work this way
RoBoRaT
PoPeYeD'SaiLoRDuDe
Sure. I was talking about credit for trade-in in Nevada, not California or Oregon.
As you can see in the attached MVPA, Tesla Nevada had credited trade-in value and only charged sales tax on the remaining cost (the car was registered in Washington).
I emphasize, that this might not be applicable for California (if OP decide to trade-in and pick up in Nevada, register in California) - that is why I said to first ask Tesla Nevada.
That has nothing (zip, nada, zilch) to do with "Tesla Nevada" and everything to do with the purchase location, which is washington, which allows tax credits. It will not do any good at all for this OP, whose location is stated in CA to contact tesla nevada (or any other tesla location in another state) if the state the car will be registered in is CA.
RoBoRaT
PoPeYeD'SaiLoRDuDe
honoraryorange
Member
Dredging up this oldish post - I feel like I'm just overthinking things, but the examples given on the state website are confusing me.
In Washington, which has these sales tax credits - Does it affect the credit if Tesla isn't the one paying off the existing loan? I only ask this because the example wording on the state website is odd (highlighted below)
Scenario: Existing auto loan with a 3rd party bank. New Tesla loan with the same 3rd party bank. So for the old loan payoff no check is needed, they basically just handle it all on the backend.
So:
1. Bank gives a blank draft check
2. Loan recipient fills out the amount and gives to Tesla for all of the costs minus full Trade-In Value, Tesla obviously gets the old vehicle as well.
3. The bank then finalizes the loan to the borrower in the amount of the amount written to Tesla + loan remainder
At #2, the sales taxable amount should be reduced by the full trade-in amount, even though technically Tesla isn't the one paying off the trade-in, right?
In Washington, which has these sales tax credits - Does it affect the credit if Tesla isn't the one paying off the existing loan? I only ask this because the example wording on the state website is odd (highlighted below)
Scenario: Existing auto loan with a 3rd party bank. New Tesla loan with the same 3rd party bank. So for the old loan payoff no check is needed, they basically just handle it all on the backend.
So:
1. Bank gives a blank draft check
2. Loan recipient fills out the amount and gives to Tesla for all of the costs minus full Trade-In Value, Tesla obviously gets the old vehicle as well.
3. The bank then finalizes the loan to the borrower in the amount of the amount written to Tesla + loan remainder
At #2, the sales taxable amount should be reduced by the full trade-in amount, even though technically Tesla isn't the one paying off the trade-in, right?
TomServo
Active Member
As F'ed Up as Illinois is at least we get the full trade-in deducted from the new purchase price and only pay state sales tax on the difference. You folks in Calif are getting raped.
Just a point of clarification, as the linked-to article is out-of-date: Maryland provides trade-in tax credit. Given that Tesla's trade-in offers are typically lower than others like CarMax, it's worthwhile to do an A:B compare, taking tax credit into consideration. I just went through this earlier this week. Tesla's offer for my 2020 MYLR was lower than CarMax, but when I factored in the tax-credit, the resulting net cost was nearly the same, affording me a bit of flexibility of trade-in timing, along with whether I want to apply the entire trade-in value to my new car, or just keep some/all of the resale money in-pocket.The state of Oregon has no sales tax, so if you live in that state and buy a car, the tax calculation is easy -- zero. In seven other states, there is no credit or sales tax reduction when you trade in a car. Those states are California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia. If you live in one of these states you calculate sales tax by multiplying the full new car purchase price times the local sales tax rate.
Calculating Sales Tax for a New Car Purchase With a Trade-In
In 42 out of the 50 states, when you trade in a car to purchase a new one, you will get some sort of sales tax credit on the value of your trade. The amount of tax you pay depends on what you are buying, what your trade is worth and your state's sales tax policies. The dealer will calculate and...
That isn't true anymore, Oregon now has a tax, albeit very small, on new vehicle purchases. (0.005%, which I think is mainly used to fund the state EV rebate.)
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