A co-worker told me today that she went to a dealship last night to look at a truck (Chevy :nono: ).

She told me that the sales manager told her that even though they were selling the vehicles at the family plan pricing that when it came to charges the taxes from the Regular Sticker plan price.

This does not sound correct to me.

Example:
Sticker/MSRP = $30,000.00
Family plan price/selling price $24,000.00

Taxes Charged from the Sticker $30,000.00

Is she getting the run around here?
I have never heard of this. Charging taxes from the beginning price.
I also thought the taxes were derived from the final number.

 

 

I am not entirely sure, but in some localities tax may be applied. I know that in Ohio as far as rebates are concerned, tax is charged before the rebate is applied. This does not apply to "employee pricing" before rebates though.
Hope this helps.

 

Heck yea! Especially from a GM company. Of course they always hide the big catch in the advertising...$6000 in taxes sure sounds like a rip-off to me

 

no no Zc527, she's not get charged $6000 in taxes, she is getting charged taxes on the original car price of $30,000 and not the sale price of $24,000. Which means she is paying tax on the $6000 that she is not actually paying for the car.

Quck example to make sure its understandable (from my own explanation above, i'm not sure if it is)

If the tax rate is 10% then the taxes on a $30,000 car is $3000. While the taxes on a $24,000 car is $2400. Because she is paying taxes on the full price of the car she may only pay $24,000 for the car but then owe $3000 on the taxes for the car, since the taxes are being calculated from the non-sale price.


I'm not sure if Ohio actually does that, but under real tax theory it makes sense. The point is to tax the value of what is received and not necessarily the amount actually paid for it. An items Fair Market Value is generally the easiest way to tax something, and regular price is going to be the FMV. If they only taxed the amount of cash that was transferred you could easily evade paying any taxes by simply exchanging items. Trade the dealership something worth $30,000 for the $30,000 car and since no cash was transferred the government gets no money.

Its actually a fairly fair way of doing it. The government gets what its supposed to get no matter how you pay and gets the value that it is supposed to get. (But not entirely fair... because if you paid $40,000 for a car worth $30,000, the government will tax that higher amount on the theory that that was the fair market value to you... but then again I think it is fair to take advantage of the stupid, how else will they learn?)

 

It smells like bull in here.

And remember kids, say :nono: to Chevy!

 

Thank goodness for the $300 limit in SC.

 

But don't you have personal property tax there?

 

oh....I see now...I didn't quite get what they were saying first off

 

For what it's worth, I got my Mustang through the X-Plan and paid sales tax on that price, not the sticker (which was $5,011 more).

I'd ask a tax professional. It's probably something that varies widely from state-to-state. And if it's determined they are BS-ing about the tax I'd call the IRS or your State AG. I'm sure they would be interested.

 

Yes, we have to pay personal property tax every year. On my new GT they estimated around $500. Sales Tax collected at the dealership, is what has a $300 limit.