Because the State can do whatever it wants, if the State legislature votes it it. It's not about fairness or logic, it is pure politics and budgets. In Illinois, you essentially pay taxes on vehicle rebates, as the state adds back in rebates to compute sales tax.

You want to hear something even more illogical and unfair? Lease a vehicle in Illinois for 3 years and you get to pay the Illinois government the sales tax on the full value of the vehicle, as if you had purchased it outright. So in this case, you didn't even buy the vehicle, and you pay the full sales tax.

The only way to get the right answer, and sometimes this doesn't even work, is to contact your States Tax Department. Often the Motor Vehicle Department will also have a sales tax form with instructions on how to compute the sales tax liability for vehicles purchased out of state. These instructions typically show how to handle the rebate for tax purposes.