Sorry if this is a long post, but couldn't really make it short.Went shopping for a new truck, and amazingly I found one that has pretty much everything I wanted, and very little that I didn't. I was feeling pretty good because there were cash rebates, and thought it would be nice to take those rebates for the first time in about 30 years, so I could add a few accessories.Well, get to the finance guy, and he tells me that I don't want to take those rebates because I will be sent a 1099 for the cash rebate, and then he rambled on about needing to treat me as a subcontractor, etc...Taking the cash was just a bad idea he said. And of course I find this out in the middle of signing all the paperwork, so I just used the rebates to discount the cost of the truck. Not a big deal really.But, not being one to trust any car dealer, and always wanting to learn something new, I did some digging. What I found was that the IRS does not consider rebates income, so no issue there. Florida does not have a state income tax, so it doesn't seem like it's an issue there. And after a long search on the internet, I could find absolutely nothing that indicates that Florida in any way taxes rebates. Next step is a call to the state to try and find out more.Went back to the dealer and said "BS". They insisted they were right, blah blah blah. One thing they said was that it was similar to having a winning Florida lottery ticket that has to be taxed. I argued that taxes are deducted when you cash the ticket, not 1099'd.So my question to everyone here, has anyone ever heard of anything like this in a state with no income tax? Or been 1099'd in a state that does tax it?This was something completely new to me, and I have bought a lot of vehicles over the years and never heard of it.

I handled automotive rebates for many years in many states and have never heard anything like that. Some states do charge sales tax on certain rebates at time of purchase but never income tax of any form. Where this originated and what the "game" is I have no idea but I would cross this dealer off any list of ones I might do business with.

Please publish the Dealer's name as we live in Fl.

So he is stating if you take a check for the rebates it is taxable but not if you apply it to the price of the truck. If that is what you are talking about you can be assured he is wrong. Because the only difference between the two transactions is where you spent the money.

https://www.irs.gov/uac/newsroom/taxable-and-nontaxable-incomeTotally bogus- a rebate is not income, it is a discount. You already paid income tax on the funds.

Sounds like the dealer is playing shenanigans with money and sales. I wonder if the dealer is keeping the "rebates" from the deals after convincing people they don't want the money? Whichever, does not sound like a dealer you want to buy from. What else can they be doing with the deal that you don't know about?

Cash rebates taxed? | Good Sam Community

JALLEN4
Explorer
Jun 25, 2017
I handled automotive rebates for many years in many states and have never heard anything like that. Some states do charge sales tax on certain rebates at time of purchase but never income tax of any form. Where this originated and what the "game" is I have no idea but I would cross this dealer off any list of ones I might do business with.
1968mooney
Explorer
Jun 25, 2017
Please publish the Dealer's name as we live in Fl.
mich800
Explorer
Jun 25, 2017
So he is stating if you take a check for the rebates it is taxable but not if you apply it to the price of the truck. If that is what you are talking about you can be assured he is wrong. Because the only difference between the two transactions is where you spent the money.
Chris_Bryant
Explorer II
Jun 25, 2017
https://www.irs.gov/uac/newsroom/taxable-and-nontaxable-income
Totally bogus- a rebate is not income, it is a discount. You already paid income tax on the funds.
Tvov
Explorer II
Jun 25, 2017
Sounds like the dealer is playing shenanigans with money and sales. I wonder if the dealer is keeping the "rebates" from the deals after convincing people they don't want the money?

Whichever, does not sound like a dealer you want to buy from. What else can they be doing with the deal that you don't know about?
Sam_Spade
Explorer
Jun 25, 2017
This makes no sense to me.
What do you think the alternative IS ??

Were you intending to finance the WHOLE list price for the vehicle, which includes the "cash rebate" amount, and then take that cash with you.......which really would amount to a loan at a REALLY high interest rate ??

It make even less sense if you are paying cash.....in which case you pay them and then they give some of it back to you ?????

"Cash rebates" are ALWAYS a deduction from the selling price. I have never heard of it working any other way......and there would be no point really.

The term "cash rebates" is just yet another in the LONG line of deceptive marketing techniques.
darsben1
Explorer
Jun 25, 2017
OH NO! Stop the presses.
A dealer lied to a customer imagine that.
How about naming the dealer and costing him a customer or two
Cobra21
Explorer
Jun 25, 2017
I would not be happy with that conversation. But if they really send a 1099 to you the government also gets a copy and 1099 means income to me.
DownTheAvenue
Explorer
Jun 25, 2017
In order for them to file a 1099, they have to at a minimum your social security number. If you foolishly allowed the dealer to run your credit and finance your vehicle, they had that information.

If you financed the vehicle, you are much better in using the rebate to reduce the purchase price, and thus reduce the amount financed and saving the interest you would have paid on that amount. If you paid cash, there is literally no difference between getting the rebate money in your pocket or paying a lesser amount for the vehicle.

I am betting this is just an poorly informed finance "manager". If the entire rebate was taken off the purchase price, then you actually received the full benefit of the rebate. No harm, no foul.
Durb
Explorer
Jun 25, 2017
I paid cash for a truck where the purchase price included a couple of manufacturer rebates. When registering the truck in the state of Washington I had to pay sales tax on the rebate amounts even though I never paid out the money. It was over $500 out of my pocket that I had not planned on. There was no discussion as the rebates being income for additional tax purposes.

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