In NY, does the "trade-in" sales tax credit apply if selling and buying from different dealers?

Ask the Hackrs Buy/Finance
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1

I currently lease a Buick which I want to sell to Carmax. In order to sell the Buick, I will have to purchase it (since Buick is no longer permitting third-party purchases) and pay the associated sales tax. I also separately lease an Infiniti which I want to buyout and keep.

Is there any way for me to receive a credit of that sales tax that I paid towards the purchase of the Buick towards the purchase of the Infiniti?

Thanks!

1 Like
2

Short answer is No.

You’re buying 2 vehicles in 2 separate transactions…why would you not be responsible for paying tax on both transactions?

You are not trading in one for another.

3

The law is the law, but I think that the logic makes sense. In a “trade-in”, you essentially receive a credit for the taxes which were already paid on your old vehicle. Now what does it matter from where you buy your new vehicle? The only thing that the current structure does it provide an unfair advantage to the dealer buying your existing vehicle.

4

Unfortunately NY is among the highest taxed states in the Union. Logic has left Albany a long time ago.

5

It’s not a property exchange though, which is where the tax credit usually comes into play. Once there’s cash for both transactions, it’s usually out the window. Logically, what you’re saying makes sense, but that doesn’t actually get you anywhere.

6

Right. The whole “exchange” is a fiction anyway. It’s just a combined purchase and sale. At least some states give you the credit if you purchase a car within X days of selling one.

Any way around this or am I just stuck paying taxes twice?

Thanks.

7

I’m not sure that’s what they do. As when you sell one, you’re not liable to pay sales tax, it’s the purchaser who pays the sales tax when registering the vehicle.

On the contrary they give you X days to sell after purchasing to avoid sales tax payment.

If you want to talk about providing one with a “Grace” period you to sell your purchased vehicle before you owe sales tax yeah i can see your point.

This.

8

Are there any states where this does apply? Would be nice to sell your car to Carvana and then get a tax credit on a new purchase at a local dealership.