Pay tax on cap cost reduction????!???!??

Splooge911 · 10-12-2010, 09:57 AM

Could this be correct? Im working the number with the dealership and there is $2000 as cap cost reduction and Im being told I have to pay tax upfront on that $2000? I have never heard of such a thing. Is this correct?

hbcpa · 10-12-2010, 10:04 AM

Sales tax methods vary by state. If NY charges tax based on payments, it makes since as cap reduction is an upfront payment.

dom55 · 10-12-2010, 10:25 AM

This is correct. I bought my car in NJ and had to pay tax on the cap cost reduction, this is why I put nothing down even though the dealer was giving me 24K for my trade in. You have to pay tax on the cap cost reduction in NY as well.

michaelw9 · 10-12-2010, 06:17 PM

You guys should be so lucky. Here in CA, you have to pay tax on the entire purchase amount of the new car, whether you have a trade in or not.

10-12-2010, 09:57 AM	#1
Splooge911 Private First Class 30 Rep 117 Posts Drives: 335i Join Date: Oct 2010 Location: New York iTrader: (0)	Pay tax on cap cost reduction????!???!?? Could this be correct? Im working the number with the dealership and there is $2000 as cap cost reduction and Im being told I have to pay tax upfront on that $2000? I have never heard of such a thing. Is this correct?
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10-12-2010, 10:04 AM	#2
hbcpa Second Lieutenant 6 Rep 211 Posts Drives: 2011.5 MR E90 M3 Join Date: Aug 2010 Location: Maryland iTrader: (0)	Sales tax methods vary by state. If NY charges tax based on payments, it makes since as cap reduction is an upfront payment.
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10-12-2010, 10:25 AM	#3
dom55 Lieutenant 34 Rep 407 Posts Drives: 2016 X5M Join Date: Jun 2007 Location: Westchester, NY iTrader: (4)	This is correct. I bought my car in NJ and had to pay tax on the cap cost reduction, this is why I put nothing down even though the dealer was giving me 24K for my trade in. You have to pay tax on the cap cost reduction in NY as well. __________________ 2016 X5M Silverstone on Silverstone
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10-12-2010, 06:17 PM	#4
michaelw9 First Lieutenant 26 Rep 333 Posts Drives: 2015 F82 Yas Marina Blue M4 Join Date: Aug 2010 Location: Oakland, CA iTrader: (0)	You guys should be so lucky. Here in CA, you have to pay tax on the entire purchase amount of the new car, whether you have a trade in or not.
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