Auto Pay Sales Tax

Today John in Youngstown, OH is curious “For an automobile purchase in Ohio does the state sales tax get applied based on the original purchase price or after rebates are applied?”


Hey John,

I don’t know about Ohio, but I do know about California, since we just bought a new car.
And I suspect that sales taxes work pretty much the same way, nationwide.

The sales taxes and the license fees are based on the full purchase price.

Alas, the rebate comes afterwards.

What a pity!

So, the best way to reduce your sales tax hit is to get the very best price when you purchase that car. After all, the lower the price is that you negotiate, the lower your sales taxes and license fees are.

Some tools you can use to get the best price?

Buying services, like Costco and AAA.

Scour the Internet for the best posted prices on new cars and use that to help you negotiate.

And there’s a terrific resource from the Federal Government’s Pueblo, CO Citizens’s Information Center http://www.pueblo.gsa.gov/cic_text/cars/newcar/newcar.htm
Besides a nifty free worksheet, they give you specific tips to help you arrive at the best price you can get.

Naturally, you’ll find answers to all your questions about auto expenses and other tax information, free. Where? At TaxMama.com

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