You thought that “Cash for Clunkers” money was free?
But many of those cashing in on the clunkers program are surprised when they get to the treasurer’s office windows. That’s because the government’s rebate of up to $4500 dollars for every clunker is taxable.
“They didn’t realize that would be taxable. A lot of people don’t realize that. So they’re not happy and kind of surprised when they find that out,” Nelson said.
…..
Nelson adds that if you did recently purchase a vehicle, ensure your dealer gets you the paperwork in time because if they don’t you could pay extra interest and penalties.
So, in South Dakota, they’re counting adding the $4500 “CfC” credit as part of the price of the vehicle. So if you thought you were only paying sales tax on a $10,500 car, you’ll be surprised to find out that you’re going to be paying for a $15,000 car.
Also, for you guys who live in states that have no sales tax and/or no sales tax on car sales, your state is legally able to count the $4500 as “Income”.
Never mind that you never got to touch a cent of it, you spent it and they want their pound of flesh out of it.
If you have both Car Sales tax AND income tax in your state they can double dip you and there is nothing you can do but smile while you drive you new car! Be careful going over those bumps. Your sphincter is probably going to hurt when they’re done with you.
Silly citizen. When will you learn that there is no such thing as “Free” when you’re dealing with the government.
Silly indeed!
Didn’t yo’ mama tell you to read the fine print?
Didn’t your drill sergeant tell you to “R.T.F.M.”?
Don’t you have a tax advisor?
Of course, since the Stimu-wallop bill never got read before it was passed, none of our leaders knew about this, either.
I’ve still got BOTH of my old vehicles, BOTH are still running, and I wouldn’t have traded them in with this Nigerian Scam (Keynan scam?) of a deal anyway….
“Please open an account with $4500 so our barrister can transfer a new car to you, which you will pay full price for…”
Yeah, right.
But thank you, CfC idiocy, my old vehicles are more valuable now since about a million or so of their competition just got crushed.
Heh!
I have done some research and I seem too have found some inconsistancies:
http://www.goodfinancialcents.com/cash-for-clunkers-tax-free-credit-rules/
and from:
http://www.cars.gov/faq
Is the credit subject to being taxed as income to the consumers that participate in the program?
NO. The CARS Act expressly provides that the credit is not income for the consumer.
So it seems the only tax liability is for sales tax on the full price
I’ll hold my verdict until one of the states (some place really strapped for cash like Michigan) attempts to tax it and see where the pebbles land (probably in the taxman’s coffers).