$1K rebates and Processing fees State of MD. taxable?

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Ritter 197 - 20 Mar 2008 16:22 GMT

A local Toyoto dealer says he must include "processing fees" and the
official Toyota $1000 rebate on 2008's Hybrids on the taxes for MD. which
are 6%.

I doubt that services (processing fees) and reductions in Price (rebates)
are taxable.

I cannot find anything when I try to "google" this question.

Any comments???

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johngdole@hotmail.com - 21 Mar 2008 02:21 GMT

You can always call MD Tax Board to ask. Usually the discount is taken
off before anything else is applied, otherwise if you negotiate a
lower price from sticker is the difference taxable too? So I think
your dealer is full of it.

2008 is forecast to be a slow year for auto sales. Tell your dealer to
lower the price some more.

> A local Toyoto dealer says he must include "processing fees" and the
> official Toyota $1000 rebate on 2008's Hybrids on the taxes for MD. which
[quoted text clipped - 6 lines]
>
> Any comments???

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ACAR - 28 Mar 2008 18:35 GMT

> You can always call MD Tax Board to ask. Usually the discount is taken
> off before anything else is applied, otherwise if you negotiate a
[quoted text clipped - 14 lines]
>
> > Any comments???

AFAIK, processing fees are not required by MD law. If they don't
appear on the sales contract, no tax.

AFAIK, a rebate is applied AFTER the final sales price is calculated.
Hence, you pay taxes on full sales amount prior to rebate. A rebate
returns part of your payment; it is done after a sale. A discount is
different, as that is done prior to the sale and decreases the sales
price and taxes.

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