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. 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.
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.
