trading down tax question.....
 

here's the scenario:

i trade in my current car for a sales price of $40K. the car i trade it in on is only $35K. what sales price is used to calculate tax? i am in texas.

I'm not sure about TX....check w/ your dealer.

In Missouri B/c your trade in value is more than the sale price of the new vehicle you'd have a 180 day credit to use and you'd have to use this credit w/in 180 days from your sale date.

credit meaning .....you'd have 5k to use on another purchase where you'd pay the state sales tax on..ie, boat,motorcycle,RV,PWC etc... they would subtract 5k from the net of your 'new purchase price' and the balance is what you'd pay sales tax on.



This is b/c your trade in value is more than the sale price of the new vehicle