Rebates question....

[Beardie]

Just leased a 3.8 AWD Tech...in order to compare apples to apples, I priced only tax and motor vehicle fees upfront. I was surprised upon pickup to be hit with a very large tax bill. When I questioned it, I was told it is because of the fact that the lessee must pay the tax on rebates (I did know this is true from a previous lease years ago). The rebates, however, on this Genny were over $5000! I know about the $500 coupons, but can't understand how the rebates could be that much. Has anyone else faced this? Is it possible for the rebates to be that high? I'm just hoping I didn't get taken in a sneaky way!

 

[bball4032]

That many rebates are certainly possible. I had $4,900, $2,000 in vouchers, $1,000 in VOC, $1,500 in lease cash, and $400 in Recent college grad. Either you had military or they figured out a way to let you use 1 extra voucher because 4 is supposed to be the max for each deal.

 

[Genentec]

what taxes on rebates ? are we all going to be sent a surprise tax bill at end if year. whats going on ? when i signed off ony my lease they didnt mention any of this.

 

[rickkapur]

In CA, we do have to pay taxes on rebates...

 

[Genentec]

so do those vouchers that hyundai uses count as a rebate ?

[QUOTES=rickkapur;191646]In CA, we do have to pay taxes on rebates...[/QUOTE]

 

[bball4032]

so do those vouchers that hyundai uses count as a rebate ?

[QUOTES=rickkapur;191646]In CA, we do have to pay taxes on rebates...

[/QUOTE]

Yes. However, you won't get a tax bill at the end of the year. The use tax and rebate taxes are rolled into your payment.

 

[Genentec]

ok so since my agreed lease price is inclusive of tax , this so called rebate tax should all in included ya ? which means no surprises for me later


Yes. However, you won't get a tax bill at the end of the year. The use tax and rebate taxes are rolled into your payment.[/QUOTE]

 

[bball4032]

ok so since my agreed lease price is inclusive of tax , this so called rebate tax should all in included ya ? which means no surprises for me later



Yes. However, you won't get a tax bill at the end of the year. The use tax and rebate taxes are rolled into your payment.

[/QUOTE]

I don't know where you are from or how your sales contract was structured, but 99% yes. I would venture that a good $40-$45 dollars of your payment is use tax and rebate tax.

 

[Beardie]

Yes, here in NY, I know we have to pay tax on rebates. Just didn't realize it could be that much......over $5000 in rebates with almost 9% tax, not small change!!

 

[Mark_888]

I can understand that a rebate paid back after the sale is completed is taxable (tax is paid on the price before the rebate), but is a discount offer really taxable? Sounds like a scam to me, but I admit that I don't really know.

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[rickkapur]

Rebate applied to lower the price is taxed.

Link below has info on sales tax on rebates, by state...
http://www.edmunds.com/car-buying/what-fees-should-you-pay.html

Says...
Rebates: Customer cash rebates reduce the purchase price of the car. But Magyar says most states charge sales tax on the full purchase amount before the customer cash rebate is applied. For a $25,000 car with a $500 rebate that reduces the sale price to $24,500, you'll pay tax on $25,000. In the chart below, look at the column labeled "Are Incentives Taxed?" If there is a "Y" in this column, it means the sales tax is based on the car's price before rebates.

 

[Mark_888]

I can understand that a true rebate should be taxed, especially if the rebate amount can be used as cash for a down payment. But most of the Hyundai discounts are not labeled as rebates, they are called discount coupons. Maybe it doesn't make any difference.