Overhaulin'

Is the tax you pay for a car on the PRICE of the car after rebates/discounts, or the MSRP?

I'm buyina car new with a MSRP of 23,035, but with a selling price of 17,988. with maryland 6% tax, they say its 1205.22 tax. but 23,035 x .06 = 1382.1, and 17,988 x .06 is 1079.28, which doesn't match their taxes. what gives?

Public Comments

1. Don't complain, if they mess up then they will have to pay the difference.
2. Is the dealership in Maryland? If not, they may be estimating the tax. Are they doing the motor vehicle for you? Perhaps that are the extra fees. Maryland DMV website says 6% of the fair market value, but I don't know if that goes for new and used cars. Is the selling price before or after the rebates. Perhaps Maryland does not include in their value. I know some states don't. But know if they undercharge you, you will be responsible for the difference...but if overcharged, they HAVE to give you a refund. I personally would ask for a DMV receipt of what tax was charged. Whether or not the title and registration is included in this so called tax.
3. I'm guessing that the dealership has a 125.00 documentation fee. Tax is figured on the sale price, NOT the MSRP. 125.00 is not unreasonable. I know some dealerships in my area have a 189.00 fee. We charge 79.00. From your friendly Toyota Salesperson :)
4. Your taxable selling price should not include the rebates/discounts. These are taken in as down payments/trade value/rebates. Maybe $20,000 less $2000 rebate plus some other taxable. Just a guess. This is done in CA.
5. Rebates and discounts are different when it comes to taxes. A rebate is not the same as a price discount. It's like money given to you by the car manufacturer for the purpose of making a down payment. Tax is determined by the MSRP minus price discounts, BEFORE rebates are applied. In other words, you pay tax on rebates, but not on price discounts.
6. Try calling a repair center in Maryland. http://www.autorepairshoplocator.com/Maryland-Auto-Repair.html They can help you get on the right track. Try vistiting a few shops and compare what they say.
7. It is based on the agreed-upon price before manufacturer or dealer rebates. The MSRP is $23,035, but you bought the car for $20,000 before rebates. I don't know what car you bought, but based on the #'s, there seems to be $2,000 rebate on the model you bought, which brought the total down to $17,988. $20,000 X .06 = about $1205.