Cash for Clunkers $4500 is Taxable: Or Didn't You Know That?

by Benjamin Domenech on 10:30 am August 26, 2009

“When you buy a new car you pay tax on the difference between the new car’s purchase price and the trade-in you present to the dealer.” Under cash for clunkers, “you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500!).” States with income tax will effectively tax you twice.

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