Which is right ?

[aggiegrad05]

Thank you for you explanation .
That dealer told me the same thing .
I can not understand why the selling price is $ 70,000 ? Maybe dealer can take away part of the $ 9000 incentive ?

I think this is why Ford uses “rebates” not “discounts”. Ford is technically selling you the vehicle for $70k, and that’s how they book it. Therefore you have to pay taxes on that price. You then get the rebate back; it’s coming out of a different pocket for Ford. You’d have to have a tax lawyer or an accountant weigh-in, but I’d be willing to bet there’s a tax and/or accounting) benefit to Ford doing it this way instead of just offering a “discount” on the vehicle and selling it for $61k instead of $70k.

 

[aggiegrad05]

Thank you for you explanation .
That dealer told me the same thing .
I can not understand why the selling price is $ 70,000 ? Maybe dealer can take away part of the $ 9000 incentive ?

On further thought, I think it’s an accounting issue. By doing a “rebate” instead of a “discount”, Ford books the sale as $70k. This helps their sales numbers and their margins, so those stay high for the Expi. They can then use money from somewhere else (a general rebate pool funded by higher margin vehicles like the F150, maybe?) to pay your rebate. And again, because youre “buying the vehicle for $70k, not $61k”, taxes have to be paid on the full sales price.

 

[Going_Going_Gone]

I guess it all depends on the individual state's taxation rules. In AZ, state regulations allow a dealer to deduct any and all of the manufacturer's discounts/rebates/PCOs (because they reduce the actual selling price) and, addition, the equity of your trade-in BEFORE they calculate the amount of sales tax that the buyer would pay. A "shady" dealer might try to collect additional sales tax and, when it's time to report accounting data to the state and remit the tax fees, they could then apply the rebates etc. to reduce the amount of sales taxes due--allowing them to pocket any overage in taxes you paid. At any rate, buyer beware: check all the numbers and ask plenty of questions. Better yet, know your state's tax regulations before you go in to buy.

 

[Rezolution]

https://www.salestaxhandbook.com/california/sales-tax-vehicles

How are rebates and dealer incentives taxed?
Many dealers offer cash incentives or manufacturer rebates on the sticker price of a vehicle in order to encourage sales. For example, a $1,000 cash rebate may be offered on a $10,000 car, meaning that the out of pocket cost to the buyer is $9,000.

California taxes vehicle purchases before rebates or incentives are applied to the price, which means that the buyer in this scenario will pay taxes on the vehicle as if it cost the full $10,000.

 

[Deadman]

Another reason to leave CA. The list is longer than a Maxx expedition.....

 

[John I]

Sales tax is calculated on the purchase price before factory rebates. This is not specific to California, most states do the same. I suspect many buyers don't even realize it, but it's obvious when factory rebates total $8K-$10K.

 

[nate6966]

One option is to decline the dealer's effort of collecting taxes or license fees, opting instead to pay them directly to the DMV. This way, you know you're only paying exactly what's required.
The huge downside is this route is not an option if you're trying to finance the bulk of your purchase. Banks may still require a certain percentage cash down payment on the loan value, and the dealer will not include taxes in the loan value if they're not collecting them.
Some dealerships do not have this option depending on regulations. Some counties/ states require licensed dealerships to collect the sales tax from residents at point of sale.

 

[Calidad]

https://www.salestaxhandbook.com/california/sales-tax-vehicles

How are rebates and dealer incentives taxed?
Many dealers offer cash incentives or manufacturer rebates on the sticker price of a vehicle in order to encourage sales. For example, a $1,000 cash rebate may be offered on a $10,000 car, meaning that the out of pocket cost to the buyer is $9,000.

California taxes vehicle purchases before rebates or incentives are applied to the price, which means that the buyer in this scenario will pay taxes on the vehicle as if it cost the full $10,000.

Makes sense a rebate would be like tax free money otherwise.