Did you pay tax on the $7500 rebate?

[ACDC]

Hello everybody,
As the thread subject states-I'm wondering if you paid sales tax on the rebate and ude credit?Went to the dealership yesterday to sign lease papers,the numbers looked good untill it came down to taxes.That's when extra $850 showed up.I was told that I have to pay sales tax(9.9%) on both the fed rebate and the ude credit.

 

[Sparky]

If I'm not mistaken, it's a tax credit not a rebate. Assuming you owe federal taxes in the tax year you buy the i3, you deduct $7500 from the net taxes owe. That's what we did. In California there was also a rebate of $2500. I think I paid taxes on that.

 

[timf]

The tax credit only applies to a purchase, and ACDC mentioned they are leasing it. In this case, the tax credit is presented in the form of a $7500 rebate/incentive that is considered a capitalized cost reduction. You do have to pay sales tax on capitalized cost reductions (typically as part of the amount due at signing unless you roll that into your lease) just as you would have to pay sales tax on the pre-tax credit price if you were purchasing.

 

[Sparky]

Oops, I bought mine.