[63falcondude]

Originally Posted by FlightSoftware

Looking at the purchase agreement it goes like this:

Price I negotiated on car +
Sales tax +
license +
registration
-----------------
TOTAL CASH PRICE (it has it capitalized, so what the heck)

Price I paid is:

TOTAL CASH PRICE -
Deposit -
Other Credits (this is the conquest rebate)
------------------------
AMOUNT TO BE FINANCED

(I didn't finance it, I brought a check with me for that amount).

So, the conquest rebate comes off the price + sales tax, same as if someone gave you $1000 to apply to the purchase.

Interesting. That almost looks like you should pay state and federal income tax on the $1000.

Thank you, exactly what I was looking for. Now I just need to know how the tax is taken out of the rebate.

[Modshack]

Originally Posted by FlightSoftware

If I have to pay income tax on the rebate, I wonder if I can deduct the price of my airline ticket to go get the car. That was $576. :(

WTF? I'm hoping you are joking here. You do not pay income tax on a rebate, and no, acquisition costs are not a deductible item..

[FlightSoftware]

Wonder what the advantage is from GM's point of view? They could just as easily applied it to the base price and we wouldn't owe tax on it.

[63falcondude]

I understand now. This applies to all states other than Alaska, Arizona, Delaware, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Nebraska, New Hampshire, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Vermont, and Wyoming.

If your negotiated price is 30,000, and rebates are 3000, then sales tax is calculated on the 30,000; let's say the sales tax rate where you live is 7% making the "out the door" price 32,100, then you take off the 3000 from that making your net out the door 29,100. So what really happened was that you ended up not getting the full 3 grand cash back because you were in effect, taxed on 7% of it (or $210).