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"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.
News, Weather and Sports for Sioux Falls, South Dakota, Minnesota and Iowa
Huge succes! Massive, even! Beyond our wildest dreams! What's going to happen when thy don't have the cash money to pay the taxes?
Huge succes! Massive, even! Beyond our wildest dreams! What's going to happen when thy don't have the cash money to pay the taxes?
Yes, its all the Obama Administration's fault that most states levy sales taxes on new car purchases. :roll:
Yes, its all the Obama Administration's fault that most states levy sales taxes on new car purchases. :roll:
What exactly do you want the federal government to do about it?
But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.
Durn government actually expecting people to realize they had to pay taxes....
Durn government actually expecting people to realize they had to pay taxes....
Yes, its all the Obama Administration's fault that most states levy sales taxes on new car purchases. :roll:
What exactly do you want the federal government to do about it?
In all seriousness, this surprised me. I guess it makes sense when you think about it, but off the top of my head, I certainly wouldn't have expected to have to pay taxes on the $4500 as income.
edit: Or maybe I'm still misreading that, and they're simply saying that you had to pay sales tax on the total amount before you subtract the $4500?
edit2: Looks like that's what they mean.
Cash for clunkers, but no tax break in Md. -- baltimoresun.com
I appreciate the sarcasm, but this is a point that no one ever brought up, when C4C was cranked up.
It should not have to be brought up. It's how car rebates have worked in the past.
It should not have to be brought up. It's how car rebates have worked in the past.
Imagine that, having to treat Free Money as income. :roll:
edit: Or maybe I'm still misreading that, and they're simply saying that you had to pay sales tax on the total amount before you subtract the $4500?
Well, of course you would. The $4,500 was eseentially down payment help from the Feds. If you buy a $20,000 car you pay taxes on $20,000! Imagine that.
You're missing the point. The sales tax on the price of the car will be added to the loan amount. The tax on the $4,500 will come out of their pockets. The rebate and the price of the car, are two different things.
The cost of the car is not the loan amount. They are two entirely different things. You do not pay taxes on the loan amount, you pat taxes on the cost of the car. Now, how exactly is it the governments fault that people where ignorant of something as basic as this?
The cost of the car is not the loan amount. They are two entirely different things. You do not pay taxes on the loan amount, you pat taxes on the cost of the car. Now, how exactly is it the governments fault that people where ignorant of something as basic as this?
I never said that you pay taxes on the loan amount. I said, that the sales taxes on the price of the car are added into the loan.
The difference being, that the sales tax on the price of the car is a totally different animal from the taxes that are going to be collected on the $4,500 that is going to be recorded as income.
Is the credit subject to being taxed as income to the consumers that participate in the program?
NO. The CARS Act expressly provides that the credit is not income for the consumer.
You really need to fact check. Source: CARS.gov - Car Allowance Rebate System - Helpful Q&As for Consumers - Formerly Referred to as “Cash for Clunkers”
Well, of course you would. The $4,500 was eseentially down payment help from the Feds. If you buy a $20,000 car you pay taxes on $20,000! Imagine that.
This is getting a bit convoluted. Maybe they should have given out a little bit less and made it tax exempt. At the very least it should have saved on the paperwork.
Huge succes! Massive, even! Beyond our wildest dreams! What's going to happen when thy don't have the cash money to pay the taxes?
As it turns out, each state determines whether to tax the clunker money. Pennsylvania doesn't, for example, but Maryland applies its 6 percent excise tax to the incentive.
If it's any consolation, there's no federal tax on the clunker incentive and you may be able to deduct on your federal tax return any state or local taxes paid on a new vehicle purchased this year from Feb. 17 through Dec. 31. A full or partial deduction is available to singles with income up to $135,000 and joint filers with incomes of up to $260,000
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