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What is taxed on a new car sale? Price - trade in or financed amount?

Discussion in '3rd Gen. Tacomas (2016-2023)' started by cactuscorn, Feb 2, 2016.

  1. Feb 2, 2016 at 8:06 AM
    #1
    cactuscorn

    cactuscorn [OP] Another FNG

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    I'm new to this buying a new car thing and I'm still not clear on how the taxes work. I'm in Texas if that makes a difference.

    Is new auto sales tax paid on the total price minus trade in or simply the financed amount if I come in with a strong cash down payment? I've heard both yet searches can only confirm total minus trade in.

    This detail means $1000 or more to my out the door cost and obviously affects my monthly payment. Could be a huge game changer depending on private sale vs. trading it in at the dealer. Thanx for clarifying for me. If it's not too much to ask, please provide a link to the tax code you refer to as I'm all about confirming laws.
     
  2. Feb 2, 2016 at 8:08 AM
    #2
    OnceARunner

    OnceARunner War Eagle!

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    Definitely state dependent. In Georgia, you are taxed on the total price minus trade-in value.

    Sorry, I do not know Texas laws, but I would be SHOCKED if the amount of your down payment had anything to do with the taxes owed. There is no reason they would only be taxing the financed portion.
     
  3. Feb 2, 2016 at 8:10 AM
    #3
    bsacamano

    bsacamano Well-Known Member

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    Price paid minus trade in value. The state doesn't care how you pay for it (cash, finance, gold bullion, goats...).
     
    BlazingInfernoTaco likes this.
  4. Feb 2, 2016 at 8:17 AM
    #4
    cactuscorn

    cactuscorn [OP] Another FNG

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    This is what made more sense to me as well but taxes can be funny things and rarely work in your favor. I was hoping for some good news for a change. Anyone wanna buy a new goat?
     
  5. Feb 2, 2016 at 11:35 AM
    #5
    TacoBella

    TacoBella Well-Known Member

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    sales Tax Capped at $300 here in South Carolina :bananadance::jellydance::kona::yay:





    But we have a yearly property tax when registration comes around.....Not bad. Levels the purchase playing field.
     
  6. Feb 2, 2016 at 2:45 PM
    #6
    mcadori

    mcadori Active Member

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    Typically, you pay sales tax (or some variant thereof) on the delta between what you put down (deposits, value of trade, etc) and the purchase price of the new vehicle. There are also states that charge an annual Personal Property Tax.
     
  7. Feb 2, 2016 at 2:55 PM
    #7
    Sam B

    Sam B Well-Known Member

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    Must be nice, Ca is tax on sale amount of vehicle. Then you take away trade-in and down payment.
     
  8. Feb 2, 2016 at 7:51 PM
    #8
    RD52

    RD52 Well-Known Member

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    A smart man would spend 5 minutes with Google and find out the relevant info from an official Texas State internet site.
    As opposed to asking a bunch of uninformed people on a truck forum. :facepalm:
     
  9. Feb 2, 2016 at 8:03 PM
    #9
    Boltsfaninmo

    Boltsfaninmo Well-Known Member

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    In MO you pay sales tax on the sale price of the vehicle unless you trade another vehicle in which case you pay on the difference only. Or, you can not trade, sell your vehicle later, go to DMV, and get a credit on the tax you paid.
     
  10. Feb 2, 2016 at 8:21 PM
    #10
    cactuscorn

    cactuscorn [OP] Another FNG

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    A smarter man would ask the question of knowledgeable and experienced people after said search, digging into it for many times longer than your half hearted 5 minutes, to learn if the "fact" was based off of unfounded information rather than ignoring it altogether. (insert appropriate yellow head). I've gotten my answer but thank you for attempting to make me look like a putz. Well done! Be sure to blast me again rather than apologize for being a troll.
     
    WATaco likes this.
  11. Feb 2, 2016 at 8:32 PM
    #11
    cactuscorn

    cactuscorn [OP] Another FNG

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    Thanx man. Didn't see any mention of a tax credit on the Texas sites I reviewed otherwise that would be a strong option. Good info for others though.

    Edit: checked on that and it's not available in Texas unless your moving to a greener car. not the case here I'd say. Thanx again.
     
    Last edited: Feb 2, 2016
  12. Feb 2, 2016 at 8:56 PM
    #12
    MSU Taco

    MSU Taco More cowbell

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    Tax is applied to balance because if a trade is applied it is deducted pre tax as you have already paid tax on the traded vehicle
     
  13. Feb 2, 2016 at 9:31 PM
    #13
    Boltsfaninmo

    Boltsfaninmo Well-Known Member

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    You're Welcome. Thankfully MO offers a credit. I go through vehicles faster then underwear, so it helps.
     
  14. Feb 3, 2016 at 4:28 AM
    #14
    viking15

    viking15 Well-Known Member

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    Information on the Internet can be wrong as well
     
  15. Feb 3, 2016 at 5:34 AM
    #15
    Kawirdr728

    Kawirdr728 Well-Known Member

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    Here in Texas your taxed on the final sale price minus any trade ins. The tax rate is also 6.25, which may or may not be lower than the standard sales tax where you live (8.25 here in ATX).

    Here's some more random info should you need it http://comptroller.texas.gov/taxinfo/mtr_veh/mv_su.html
     
    old-timer likes this.
  16. Feb 3, 2016 at 7:43 AM
    #16
    cactuscorn

    cactuscorn [OP] Another FNG

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    Thanx Kawirdr. 6.25 here as well.
     
  17. Feb 3, 2016 at 3:13 PM
    #17
    SamKha

    SamKha Well-Known Member

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    Sorry but what do you mean then you take away trade-in and down payment. Do those affect the tax at all? will I be taxed less if I put more as a down payment?
     
  18. Feb 3, 2016 at 3:47 PM
    #18
    JoeRacer302

    JoeRacer302 Well-Known Member

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    Why not look up for your state? This info is available on any DMV page. Every state is different. They may have a variable tax rate, for example 5% on everything under $5000 and 2% on everything over $5000. You may have a reduction in taxable amount for trade in value, or you may not ... all of these things are state dependent.

    If reading your DMV website is too much work, then maybe you can visit a car dealership and just get a quote on the price of the vehicle ... if that's too much work, maybe you can ask a bunch of random people on the internet to give you half assed responses that you shouldn't trust :)
     
  19. Feb 3, 2016 at 4:03 PM
    #19
    cactuscorn

    cactuscorn [OP] Another FNG

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    Thank you?
     
  20. Feb 3, 2016 at 4:08 PM
    #20
    Sam B

    Sam B Well-Known Member

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    You are taxed on the full sale amount for a new vehicle and then they take off the trade and down for your final price.
     

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