re: #600 avanti

It’s only taxed as state sales tax, just like any rebate would. i.e., if you bought a car for $13,500, and the rebate got you down to 10K, you pay sales tax on the full price of the car and of course the dealer pays tax on the rebate income he gets.

BZZZ. Wrong. Thanks for playing.

Some states regard the rebate as being part of the taxable income - whether to dealers or the end user (buyer).

Proof?

Arizona: The CARS Program does not provide for an exclusion from federal taxable income for the payments received by a motor vehicle dealer from the federal government under the CARS program and similarly, Arizona statutes do not provide an adjustment to subtract the amount of the payments received by the motor vehicle dealer from the federal government under the CARS program. Therefore the motor vehicle dealer is subject to Arizona income tax on the amounts received under the program to the extent that the amounts are included in federal taxable income.

As far as personal income tax? Let’s look at California:
The Franchise Tax Board (FTB) will treat CFC as a sale or exchange of the used car that the person delivers, in exchange for consideration of $3,500 or $4,500 (amount realized) rebate. Persons trading in used cars may offset the applicable amount realized by their basis (generally cost) of the used cars relinquished in determining whether they realized gain on the transaction. However, personal losses on the sale of personal assets, such as a family car, may not be used to reduce taxable income.