March 29, 201214 yr I am looking at buying a SUV and have a few questions - MSRP on SUV $55,000 Dealer will take $45,000 Our trade equity is $10,000 I finance $35,000 What do I pay sales tax on? Difference in buying in Ky. or out of state?
March 29, 201214 yr I am looking at buying a SUV and have a few questions - MSRP on SUV $55,000 Dealer will take $45,000 Our trade equity is $10,000 I finance $35,000 What do I pay sales tax on? Difference in buying in Ky. or out of state? It used to be based on the sticker. I think it changed to being based on the sales price less that trade-in value (not equity). How much is the trade allowance?
March 30, 201214 yr Author It used to be based on the sticker. I think it changed to being based on the sales price less that trade-in value (not equity). How much is the trade allowance? Giving $24,000 for trade in.
March 30, 201214 yr On used vehicles, I know they give you the trade in deduction, but I am pretty sure on new vehicles, you pay on the contract price. In your example I think the sales tax would be 6% of 45k. Kentucky: Department of Revenue - Motor Vehicle Taxing Methods
March 30, 201214 yr I know many of you are much more educated than me but my understanding is like Watusi's, in other words, if you are buying a used vehicle and trading a used vehicle you get the deduction, but if you buy a new vehicle there is no deduction for a traded vehicle and you pay the full amount. I would assume the dealership would be able to help you with this (and I may call a couple of others to be sure). Additionally, call the clerk's office in your county and ask them.
March 30, 201214 yr On used vehicles, I know they give you the trade in deduction, but I am pretty sure on new vehicles, you pay on the contract price. In your example I think the sales tax would be 6% of 45k. Kentucky: Department of Revenue - Motor Vehicle Taxing Methods Thanks, Watusi. I knew that was how they used to do it for new but I thought that was changed. Obviously not.
March 30, 201214 yr I am looking at buying a SUV and have a few questions - MSRP on SUV $55,000 Dealer will take $45,000 Our trade equity is $10,000 I finance $35,000 What do I pay sales tax on? Difference in buying in Ky. or out of state? Mrs. Vito works at a car dealership and she said you should only have to pay tax on $35,000.00.
March 30, 201214 yr Mrs. Vito works at a car dealership and she said you should only have to pay tax on $35,000.00. Ms. Vito is spot on, its what the final sale price of the vehicle is. CBDV - depending on what type of SUV it is, you should be able to talk the dealer down more than 10,000. Find out how long the vehicle has been on the lot, I know after 75 or 90 days, somewhere around there, they have to start paying inventory tax on the vehicle, trust me they will want to move it. I talked dealer down 16,000 on my last truck I bought.
March 30, 201214 yr Ms. Vito is spot on, its what the final sale price of the vehicle is. CBDV - depending on what type of SUV it is, you should be able to talk the dealer down more than 10,000. Find out how long the vehicle has been on the lot, I know after 75 or 90 days, somewhere around there, they have to start paying inventory tax on the vehicle, trust me they will want to move it. I talked dealer down 16,000 on my last truck I bought. It's not the "inventory tax." Every dealer pays what's called "floorplan expense" for their new cars. When the factory sends them 50 new cars the dealer essentially takes out a loan from the factory. The longer the vehicle sits on the lot the more the dealer pays in interest ie floorplan expense.
March 30, 201214 yr Watusi was correct and linked the proper info. I verified it with the clerk of courts. New car tax is based upon 6% of 90% of the STICKER PRICE - not the sales price.
March 30, 201214 yr Watusi was correct and linked the proper info. I verified it with the clerk of courts. New car tax is based upon 6% of 90% of the STICKER PRICE - not the sales price. So to take it a step further they will pay 6% of 90% of $55,000 or 6% of $49,500 for a total tax amount of $2,970. I do need someone to check my math, I did that real quick.
March 30, 201214 yr So to take it a step further they will pay 6% of 90% of $55,000 or 6% of $49,500 for a total tax amount of $2,970. I do need someone to check my math, I did that real quick. You are correct for a new car which I assume the first example is.
March 30, 201214 yr So to take it a step further they will pay 6% of 90% of $55,000 or 6% of $49,500 for a total tax amount of $2,970. I do need someone to check my math, I did that real quick. :thumb:
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