Do you know this with 100% certainty? Just want to make sure. Also are you a PA resident?
I have only leased 2 vehicles in my life up to now but have been a voracious reader of leasehackr over the past 2 years. I had no idea what I was doing on those first leases so didnāt even think about this question.
However, having gained tremendous knowledge, and with my lease ending in 6 month, with my eye on a 4xe with $12k of incentives minimum this absolutely matters now,
I am honestly shocked that this is not a yes/no definitive answer. Is this a PA specific thing with the vagueness?
Would you mind weighing in over here?
Last I checked, no tax on rebates
For a data point my eqs had no taxes itemized
Leased a number of cars in PA over the years. Did not pay tax on any of the incentives. As it relates to Jeep, leased a wrangler 4xe about a year ago from a MD dealer and just leased a GC 4xe last month from PA dealer with no tax on incentives. About to lease another GC 4xe and there isnāt tax on the numbers Iāve seen thus far.
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Thank you @Brown623!
As a PA resident, hoping to confirm:
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It should not matter whether leasing out of state or not, correct? If vehicle registered in PA, itās untaxed?
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Are all types of incentives untaxed in PA or only certain? (e.g. dealer cash and customer rebates like loyalty?)
Kinda want to look back at my last few leases to see if the out of state dealer did it correctly, as Iām not sure if something like this would caught and kicked back if incorrect. Is there a quick way to tell on standard lease agreement whether they taxed the rebates?
This is good to know ā previously when finding target deal based on pre-incentive discount & rebates, I donāt believe Iāve ever consistently used the untaxed incentives field exclusively. I prob left some money on the tableā¦
PA does not tax incentives
So the incentives/rebates advertised on Audi etron GT should not be tax in PA when used as cap cost reduction, correct?
Thanks
Out of State dealer is insisting that customer direct rebates are taxed in a lease. Does anyone have documentation I can share with them stating otherwise? And to add to the confusion more, a trusted broker here is also stating that rebates/incentives are taxedā¦so confused
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Did anyone ever get a final answer on this? I have an NJ dealer not charging tax on incentives and a PA dealer charging them.
Reviving this: I have never personally had an issue with this at any dealer (whether leasing in PA our out of state). That is, they have always correctly built the deals so that tax is NOT applied to any rebates or incentives (regardless of type).
Since others seem to have issues with this, thought it would be helpful to find the reference in the PA tax code:
tldr: As long as they are point-of-sale / instant, and referenced on the lease contract, then they are not taxed.
(2) Discounts. Amounts representing on-the-spot cash discounts, employe discounts, volume discounts, store discounts such as āābuy one, get one free,āā wholesalerās or trade discounts, rebates and store or manufacturerās coupons shall establish a new purchase price if both the item and the coupon are described on the invoice or cash register tape. An amount representing a discount allowed for prompt payment of bills which is dependent upon an event occurring after the completion of the sale may not be deducted in computing the tax. A sale is completed when there is a transfer of ownership of the property or services to the purchaser.
Further, from PA dept of revenue:
"The reduction coupon has to be an instate rebate (Not a mail in rebate/coupon). If it is an instant rebate/coupon that states it is lowering the amount of the purchase price and it states it on the lease/Purchase contract it will lower the price of the purchase price. Which changes the total price of the vehicle and the amount of tax.
If it does not met the above criteria then it would not change the purchase price and sales tax would be charged on the original purchase price even if there is a coupon that reduces the total."
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even the Audi Q6 PND in PA has the rebates incorrectly taxed 
Anyone who pursues the deal in PA does not get the rebates taxed. Itās posted like that because 95% of the inquires come from outside of PA from the surrounding states where rebates do get taxed. Iād rather have the PA people who inquire be pleasantly surprised when their DAS or monthly goes down by a lot, vs having people from NY/NJ/CT/etc be annoyed as to why it went up so much for them, since those inquires are maybe 10:1 other states to PA.
I am well aware that rebates arenāt taxable in PA and it was adjusted for anyone who actually got that deal in PA
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Sorry did not mean to pose that as a direct call out to you, and your explanation makes perfect sense!
More so just annoying when you hear stories of LHs who are registering in PA having to convince their dealer (even some IN STATE) that rebates are untaxed. Related, I remembering some folks posting stories that some brokers (or their dealers) are unwilling to apply the proper taxation for PA customers. Maybe itās bc they think taxing them is the right way (and they need educated) or maybe theyāve always been doing it that way never had a reason to think otherwise (e.g. maybe deals continue to be funded and it doesnt get flagged by DMV)
I think it should be called out when the latter happens (LH brokers not willing to keep the same deal but with rebates as untaxed). Sure, if their dealer needs educated, at least now we have the writing from PA code to explain.
Sure, makes sense, incredibly annoying when PA dealers somehow act like they donāt know this.
Out of state itās less shocking, although I know at least 1 major dealer CRM/desking tool does automatically not tax the rebates if itās a PA ZIP.
If the rebates in PA get taxed on the contract, are these kicked back or refunded? Or does someone just get the extra profit?
I honestly couldnāt say, Iāve never done it wrong to find out lol.
I would hope it wouldnāt validate but who knows, probably depends on how good that brands contract validation is
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Any over payment in tax should be refunded legally. Thatās a big no no to profit off taxes. The paperwork would be wrong so itās easily caught. Usually a check is mailed right to the customer from the bank so the dealership doesnāt even touch the money anyway.
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