Cash rebates taxed?

tinstartrvlr wrote:
Winnie, you may very well be right, especially in your earlier post where you mentioned that one pays tax on the full price, not the price minus the rebate. That is where the tax is collected. Why a 1099?

But what made me most suspicious with this whole situation is the comment from the finance guy about "subcontractor", along with 1099. Unless I am missing something, subcontractor generally means someone doing work for someone.

So let's say I took the cash rebate and got the mystery 1099. Who do I submit it to at tax time? The state has no income tax, and the IRS doesn't consider it income. I am certainly not going to call the state department of revenue and declare myself a subcontractor just to pay taxes on a rebate. That doesn't even seem realistic.

It's just really hard to believe it's not some legal but underhanded way to put money in their pocket since they basically tried to steer me away from the cash rebate, and assign it to them, which they then use to discount the vehicle (on paper anyway). Why would they be trying to steer me away; what do they care?

In my case, the rebates were a total of $1750; even if I had to pay some tax on that, say 6 percent, it comes out to $105. That leaves me with $1645 to play with. Would have gladly done it. But I was led to believe it was such a bad idea.

The whole thing just stinks a bit, I just don't know why.

I have no idea, I hope Jallen4 will jump in on this he/she is an expert. Perhaps they do indeed need to do a 1099, to satisfy the IRS

I strongly suspect to send you cash just creates more paper work for the dealer, and also maybe tied to incentives from the manufactures, does not necessary make them crooked, but perhaps lazy, I do not know