Will I have to pay taxes on the amount of the rebate?

Will I have to pay taxes on the amount of the rebate?

James Bell (Publisher, Auto Reviewer) gives expert video advice on: What does "balloon payment" mean?; What does "base value" mean"?; What does "buy here, pay here" financing mean? and more...

With regards to financing your car, rebates are not taxable. In fact, rebates will reduce your tax burden because in most cases the rebate is not a realized fund of money but it actually just goes in to increase the down payment on the vehicle. Therefore the rebate reduces the transaction price of the vehicle, which also then reduces the sales tax burden for that vehicle.