Cash rebates taxed?
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. ...
Forum Discussion
tinstartrvlr wrote:
Just a couple points to help clarify...
I do understand the part about the price of the car being taxed prior to the rebate, which is what Durb and Winnie are saying. And that is true in Florida. That is where the so-called-tax on the rebate would be collected. No 1099.
There is a provision in the IRS code that I found that says, if I understand correctly, that if the rebate is assigned to the dealer, they must claim it as income. But not a car buyer.
The 1099 garbage is what got me, especially since the IRS doesn't care. If Florida had a state income tax, then maybe somehow a 1099 would be applicable. But it doesn't. 1099 is commonly for a subcontractor, which I obviously am not.
If this is another way for a dealer to scam, well it's a new one to me. Just not sure why they would do it. And if it is a new scam, buyer beware. Never thought buying a car would mean needing to take a lawyer and account with you.
And silly me for letting the dealer run my credit and find me a better rate than the 2.9 my bank was offering.
And yes, no harm/no foul. I just really wanted the cash to buy some goodies for the new truck.
Many thanks everyone for your input.
Since no one has really ever heard of this situation, I am going to continue to research and hopefully a call to the state will clear up some things.
I will absoulutely repost when I get some answers.
Thank you again.
I think this is the difference:
If the dealer writes you a check for the rebate, then the manufacturer's rebate is assigned directly to dealer as compensation for that check to you. And that means the dealer is assigned the rebate and THEY have to pay income tax on it.
If you use the rebate amount towards the purchase price of the truck, then the manufacturer's rebate is assigned to you and you have signed to turn it directly over to the dealer. As the rebate is not assigned to the dealer THEY do not have to pay income tax on it.
In neither situation will you have to pay income tax on it. The salesman was giving you a twisty windy tale to convince you it would affect YOU - but in reality it only affects the dealer.
