Do you pay tax on the tax rebate in New York State?

I'm leasing an egolf from a dealer in Massachusetts but I live in NYS and have to register the car and pay tax in NYS before I pick up the car, I'm unclear if I pay tax on the $7500 rebate?

The7500 is a tax credit offset against calculated Federal incomes taxes, and is not taxable income as far as I know.

Ron

on my lease agreement the $7500 is listed under cap cost reduction along with my down payment and also included in the total of payments, so I feel like the DMV will try to tax me on that.

embeleco said:

on my lease agreement the $7500 is listed under cap cost reduction along with my down payment and also included in the total of payments, so I feel like the DMV will try to tax me on that.

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For sales tax purposes, you should be taxed on the cap reduction since it is part of the selling price of the vehicle. In California, you pay sales tax on the portion of the car that that you're paying for. At the start of the lease, you pay tax on all of the up-front cost which includes your down payment and the cap reduction. The monthly payment includes "use tax" which is another form of sales tax on the monthly payment. The portion you don't pay sales tax on is the residual value, because you didn't "use" that portion of the car. If you were to buy out the lease, you would then pay sales tax on the residual value.

Yes, In NYS you pay tax on the rebate. It is part of the down payment, cap cost reduction, in a lease.
Money down, in cash, or rebate - dealer or customer, rebates are all taxable in NY.
Massachusetts is the only place I now where that isn't the case.

If you buy, it's not part of the consideration as you get a tax credit. So you pay upfront, full amount for the car, including tax on full amount, and then file for a credit to the taxes you owe. If you paid any taxes up to $7500, then you can apply that credit. if you paid 0 taxes, you won't get the federal credit.

Lease Tax is on the cap cost minus the residual. Purchase is on the whole thing. The only way to reduce that amount is if the manufacturer reduces the price of the car. Ford recently reduce the price of identical cars year to year.

Leasing gets the $7500 federal credit applied up front as a rebate, Cap Cost Reduction, taxable in most states, and manufacturer files to get it back, so they give it to you as a rebate.

Same way as if you put money down, you still pay tax on what you put down, except you lower your payment and interest charges.