I live in Taxachusetts (Massachusetts) I was told by the dealer when I trade in my old tractor that I paid the 5% sales tax on I cannot deduct that trade in cost of the tax on the new tractor. Example, if the dealers trade in value is $5000.00 and the sales tax is 5% this equals $250.00.Is it true that you pay the entire tax of a new tractor even though you are trading in a tractor that you already paided tax on?This does not seem fair to be taxed twice.
Double tax ?
- Thread starter czr
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RichNJKubota
Gold Member
You should revolt against the taxes and dump your new tractor into the Boston Harbor!
The Boston Tarctor Party.
Rich
The Boston Tarctor Party.
Rich
gmsssi
Platinum Member
That's the first time I ever heard that one. I've always known to get the tax credit from the trade in. My, my, these tax schemes are getting ridiculous. You need to find out for sure on that one, just seems unfair. That trade-in will earn tax again from the next buyer. Jeez........... /forums/images/graemlins/confused.gif
Haneyrm
Silver Member
Maryland is the same way. Buy something and pay tax on the full purchase price. Trade it in on a new something and pay tax on the full purchase price again. Florida only makes you pay tax on the difference between new and trade. It only makes sense. Actually there is not tax on tractors in the state of Florida if they are used of agriculture of any kind.
Mike
Mike
JoeR
Platinum Member
Time for another Boston Tea Party! It's amazing the state where the first tax rebellion occurred is the leader in taxes and limits on freedom.
SnowRidge
Elite Member
It is pretty common for states to tax the full retail price. They don't care if part of the payment was your old tractor or your old Buick.
Some states do differ, and some have caps.
If I recall correctly, the voters got an initiative onto the ballot in Washington state that eliminated taxes on the trade it part of the price. The politicians howled that government services would be cut, etc., etc.
The initiative passed hands down.
If I have my facts wrong on this, I'm sure somebody from 'New Cascadia' will correct me. /forums/images/graemlins/wink.gif
Some states do differ, and some have caps.
If I recall correctly, the voters got an initiative onto the ballot in Washington state that eliminated taxes on the trade it part of the price. The politicians howled that government services would be cut, etc., etc.
The initiative passed hands down.
If I have my facts wrong on this, I'm sure somebody from 'New Cascadia' will correct me. /forums/images/graemlins/wink.gif
Highbeam
Super Member
The state could get tax revenue each time a vehicle is sold. Maybe something like my bulldozer that will be bought and sold some 5 times through its life.
Here in WA they did get the vehicle registration reduced to 30$ like they have in OR. But then by the time you actually get there it is more like 60$. Sure beats the heck out of 600$ though when it was based on vehicle value. We are now getting ready to repeal a new 9 cent gas tax that our new lame governeor decided to add. We all hate taxes, and now it is just principle.
Here in WA they did get the vehicle registration reduced to 30$ like they have in OR. But then by the time you actually get there it is more like 60$. Sure beats the heck out of 600$ though when it was based on vehicle value. We are now getting ready to repeal a new 9 cent gas tax that our new lame governeor decided to add. We all hate taxes, and now it is just principle.
gmsssi
Platinum Member
In PA you pay tax on the difference in price of the new vehicle and price agreement of the vehicle being traded!
Illinois only taxes the net CASH price of the vehicle. You deduct the trade in from the cost of the new. I had one deal where I traded 4 old british motorcycles for one restoration. Since the net deal was a cash maker for me, there was no tax on the transaction.
I love Illinois, except for most of the politicians!!!!! /forums/images/graemlins/grin.gif
I love Illinois, except for most of the politicians!!!!! /forums/images/graemlins/grin.gif
frank_f15
Super Member, Rest in Peace
same up here in NY, trade in is deducted before tax is figured, which is odd Because NY taxes for every thing /forums/images/graemlins/mad.gif
JJT
Veteran Member
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- Kubota L3710 HST and a Kubota ZD21 60Pro
I've worked and lived in both NY and Mass, NY is worse than Mass on taxes. I'll take your flat 5% any day. NY deducts the trade in value for vehicles before they compute your sales tax, but then they take up to an 8.25% bite. The NY income tax is half again what it is in Mass.
Junkman
Super Member
There are a few things that need to be known before it can be determined if the dealer is correct in his thinking. If the dealer is located in Massachusetts, I believe that the trade is deducted from the price of the new tractor. If the dealer is located outside of Massachusetts, and isn't registered with the State of MA for collecting sales tax, then the entire sale amount before the trade is taxable. If the dealer is registered with the State of MA to collect MA sales tax, then the net price is the taxed amount. I am assuming that the rules for tractors are the same as the rules for automobiles. I have searched the MA Department of Revenue website, but couldn't come up with any instructions concerning this. I do know that on the MA Sales Tax reporting form, line 2 is for "Sales for Resale/ Exempt Sales or Other Adjustments". I believe that this is where he would insert the amount of the trade when he reports sales taxes to the State. If you want a definitive answer, you can call the Massachusetts Department of Revenue, Taxpayer Service at 1-617-887-MDOR or Toll-Free in MA 1-800-392-6089.
Now, if you really want to save big on the purchase, you can take advantage of the upcoming MA Sales Tax Holiday August 13 & 14. This will allow you to purchase any item up to $2500 for personal use and not pay any tax on that item. If you purchase the loader and it cost under $2500, then there will be no tax. If you purchase the Mid Mount Mower, which sells for under $2500, there is no tax on that item either. There is no deduction for items that sell for over $2500 in this Holiday regulation. The other wrinkle is that it must be paid for during the Holiday exemption period. If you are financing the item the sales contract and financing must also be done on this Holiday. The rules for this Holiday are quite stringent and the dealer might not want to do separate sales for the loader and mid mount mower, but if it is done properly, you will have no problems. I suggest that you speak with the dealer of choice beforehand to make all the arrangements. You might not save on everything, but it will at least help you on some of the purchase. Junk...
Now, if you really want to save big on the purchase, you can take advantage of the upcoming MA Sales Tax Holiday August 13 & 14. This will allow you to purchase any item up to $2500 for personal use and not pay any tax on that item. If you purchase the loader and it cost under $2500, then there will be no tax. If you purchase the Mid Mount Mower, which sells for under $2500, there is no tax on that item either. There is no deduction for items that sell for over $2500 in this Holiday regulation. The other wrinkle is that it must be paid for during the Holiday exemption period. If you are financing the item the sales contract and financing must also be done on this Holiday. The rules for this Holiday are quite stringent and the dealer might not want to do separate sales for the loader and mid mount mower, but if it is done properly, you will have no problems. I suggest that you speak with the dealer of choice beforehand to make all the arrangements. You might not save on everything, but it will at least help you on some of the purchase. Junk...
Alan L.
Elite Member
In Texas, you pay sales tax on the net difference. At least thats true on motor vehicles - I would assume it would be the same for a tractor.
SnowRidge
Elite Member
<font color="blue"> (If you have Ag exempt property there is no sales tax on farm equipment here.) </font>
If you grow anything for sale for human consumption is pretty much how they describe it in TN. The exemption is on capital expenses of $200 or more, IIRC. You don't need an Ag number, or anything like that. You just sign an affidavit at the dealer, who keeps it on file.
If you grow anything for sale for human consumption is pretty much how they describe it in TN. The exemption is on capital expenses of $200 or more, IIRC. You don't need an Ag number, or anything like that. You just sign an affidavit at the dealer, who keeps it on file.
Junkman
Super Member
This morning I called the MA DOR and asked the question. The person needed to check with a higher up and came back with the answer that it is the net amount of the sale after the deduction is taken for the trade in. If your dealer still has questions about this, I suggest that he also contact the MA DOR to verify what I have just told you. As with any governmental agency, you might get two differing answers, but in this case, I doubt it.... Junk..
milstencil
Member
JJT,
Having moved from NY to MA recently, I found they have this sneaky tax called an excise tax, 2.5% of the BOOK value each year payable to your local taxing authority. You may pay 8.5% at the sale, we pay 5% + 2.5% every year ther after for as long as we own the vehicle. Winds up being more than 8.5%.
I pay $17.50/yr on my 1952 Dodge pick up, and my new chevy truck will cost me $1000 this year in excise tax.
Go to PA, buy and trade your tractor, have a friend act as the trucking company, pick up the tractor and deliver to you. NO tax.
Rick
Having moved from NY to MA recently, I found they have this sneaky tax called an excise tax, 2.5% of the BOOK value each year payable to your local taxing authority. You may pay 8.5% at the sale, we pay 5% + 2.5% every year ther after for as long as we own the vehicle. Winds up being more than 8.5%.
I pay $17.50/yr on my 1952 Dodge pick up, and my new chevy truck will cost me $1000 this year in excise tax.
Go to PA, buy and trade your tractor, have a friend act as the trucking company, pick up the tractor and deliver to you. NO tax.
Rick
I spoke to the Mass Dept of Revenue today. They said tractors are not considered a motor vehicle,so core charges apply." In essence, the core charge in an exchange sale is a trade-in. Only trade-ins of motor vehicles,trailers,boats and airplanes are excluded by statute from the sales tax. I guess that is called the cost of doing business in Massachusetts...
