by 
Joe On
ANSWERS: 2
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Well, normally, when you buy a new car and have a rebate coming, the dealership has a form they have you fill out. This form basically says that you are transferring the rebate into the name of the dealership. In exchange, the dealership will discount the price of the car by the same amount. So, in such a case, you would be taxed on the amount AFTER the rebate. I don't know that this is how it's done in every dealership, but it was done this way in the dealerships I have worked in. ASWERS 101: Ahhh... another bad rating/no supporting evidence from answers101... My response to the query was in regard to my own experience selling cars. It was a staement of facts, not opinions. Just because one doesn't provide links to official government taxation websites citing specific laws regarding a matter, doesn't mean the answer is wrong.
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Depending on state. In NJ any manufactures rebates are treated as down payment assisitance. You pay tax on the retail price minus the trade in value.
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