Tips on Buying Cars: Sales Tax on Vehicle Rebates and Incentives, department of motor vehicles, state of pennsylvania

Question
I've been dealing with a dealership in Virginia who claims that I have to pay sales tax on incentives and/or rebates.  Do you know the laws on this for the state of Pennsylvania.  I've argued with the sales manager over this.  He first said I had to pay 7 sales tax and I'm a life long resident of PA and knew it was 6% except near Phila.  Just don't want to get ripped off.  He also said I have to finance the sales tax because there is a lean on the vehicle (ie. the loan.)  I wanted to pay the sales tax when I registered the vehicle in PA.  Any help would be greatly appreciated.

Answer
Cathy,

Thanks for your question.  I have searched and searched for the laws of sales tax on the purchase of a vehicle where you live and I can not find where you have to pay sales tax on the rebates and incentives.  That does not mean that it isn't true.  Your best bet is to call the Department of Motor Vehicles in the county or parish that you reside in, and ask them.  In most states you do not have to pay sales tax on the incentives or rebates, and I have never heard of it before, but I am not the end all on this issue.  I would call the DMV.  As for if whether you finance the taxes.  In most out of state situations, i.e you are buying a vehicle in a different state than you reside, it is up to the lender.  If the lender requires it, then yes you have to.  However, you can pay for it in cash at the dealership, by putting that amount of money down, and you would not have to pay interest on it.  There are some lenders out there that don't require that you include it, or that the dealer charge you for it, but most do.  If I were you, I would call the DMV and get all of the fees and taxes that you would have to pay and be armed with that information and go from there.

Hope this helped a little.

Thanks - JB