Should sales tax be computed before or after credits?

On a purchase, should the sales tax be computed on the amount before or after the $3500 NMAC cash and $100 LEAF loyalty are deducted?

I think my sales tax (GA) was calculated after the NMAC cash back. But, I'm not 100% sure.

LTLFTcomposite said:

On a purchase, should the sales tax be computed on the amount before or after the $3500 NMAC cash and $100 LEAF loyalty are deducted?

Click to expand...

You would need to take a look at the 'offer' in both cases as well as your local state sales tax laws ... most of the time, any 'cash' offers come right off the purchase price just like a trade-in would. A number of years ago, there was a 'cash for clunkers' program and it came right off the final negotiated price less the trade-in and then we paid IL sales tax on the balance. Most people misunderstand the Federal Tax Credit but you didn't mention that ... took a bit but this was their legalize, appears it applies only to in-stock cars as well and appears the dealer needs to tell you specifics:

(4) $3,500 NMAC Cash available on 2015 LEAF. NMAC Cash valid 10/1/2014 through 10/31/2014. Available when you finance through NMAC. Subject to credit approval. Down payment may be required. Available on purchase. Must take delivery from new dealer stock. See dealer for details. Subject to residency restrictions.

Dealers want to add the tax onto the amount before the credits. I suspect they are pulling a fast one, 6% of $4500 is $270, which they would pocket and never send to the state.

Depends on the state.

http://www.edmunds.com/car-buying/what-fees-should-you-pay.html" onclick="window.open(this.href);return false;

cwerdna said:

Depends on the state.

http://www.edmunds.com/car-buying/what-fees-should-you-pay.html" onclick="window.open(this.href);return false;

Click to expand...

Thanks for the link. So there you have it, my state basically benefits from an artificial inflation of the sales price.

LTLFTcomposite said:

On a purchase, should the sales tax be computed on the amount before or after the $3500 NMAC cash and $100 LEAF loyalty are deducted?

Click to expand...

after

apvbguy said:

LTLFTcomposite said:

On a purchase, should the sales tax be computed on the amount before or after the $3500 NMAC cash and $100 LEAF loyalty are deducted?

Click to expand...

after

Click to expand...

I agree that's what it *should* be, but according to that article that isn't the case. So basically a manufacturer is screwing you when they offer cash back instead of just facing the reality that the product isn't worth it and cutting the price. When the rebate is $500 or $1000, it's easier to overlook, but these two incentives total $4500, resulting in paying $270 sales tax on phantom value for the product.

LTLFTcomposite said:

Dealers want to add the tax onto the amount before the credits. I suspect they are pulling a fast one, 6% of $4500 is $270, which they would pocket and never send to the state.

Click to expand...

Never would happen in CA, and the sales tax regulations insure they get more than they deserve just like on cell phones.