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I don鈥檛 know about California, you guys are weird anyway 馃槃 but in all the states that I鈥檝e lived the sales tax is not deductible. That鈥檚 why it鈥檚 called double-taxation. You pay your income tax and whatever is left over is yours to spend, but you pay more tax on everything you buy. The only sales tax that is deductible from the adjusted gross income is the tax on the items that are deductible. Like if I buy a computer for my business and expense it out as a business expense, then the entire amount (including sales tax) can be deducted from my income to lower my adjusted gross income that I would pay income tax on.

In my state, I have to pay 7% sales tax on a vehicle purchase, and none of that is tax deductible unless I buy the vehicle for my business, but I will have to amortize it over the course of several years because you can鈥檛 deduct the entire value of a car in one year. I think the limit for that is an item that costs less than $2,500, which can be deducted in its entirety.

But for private car purchases, there is no tax deduction for the sales tax paid on the car purchase. Of course, the ID.4 has a $7,500 federal income tax credit, so if you owe more than $7,500 in federal tax, you can reduce the federal income tax by $7,500, which is more than the 7% sales tax on the $50,000 price of the AWD ID.4.
No, I must be weirder than weird because I lived in 5 other states and one other country before I settled in Ca.
It turns out 6 other states besides Ca do not reduce sales tax for trade-ins, and nobody ever cracks jokes about those states - they don't dare with some of them, ha, ha. Anyway, who can say anything bad about Hawaii for example?
This is from Zacks (the first part supports your case and the second part mine):
"Trade-in Value Increase
Another way to view the sales tax reduction from trading a car -- and a favorite view of car dealers -- is that the reduced sales tax can be equated to a higher value for your trade-in. If the dealer gives you $10,000 for your trade and trading the car reduces your sales tax bill by $800, you are in effect receiving $10,800 for the car you are trading. If you sold the car on your own, you would not receive the sales tax savings, so would have to sell the car for more than $10,800 to come out ahead of going the trade-in route.
States without Tax Benefit
The state of Oregon has no sales tax, so if you live in that state and buy a car, the tax calculation is easy -- zero. In seven other states, there is no credit or sales tax reduction when you trade in a car. Those states are California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia. If you live in one of these states you calculate sales tax by multiplying the full new car purchase price times the local sales tax rate".

Hmmm, I'll have to ponder the rest of what you said as I don't do my own taxes, so I may have used a wrong word or two in previous post. All I know is that when I itemize deductions I pay less taxes than if I were to take the standard deduction, even with recent tax law changes. And sales tax and property tax are part of my itemized deductions. Maybe I should move to Oregon where things are simpler.... Nah, we're getting into cold season, and I already bought my Pro anyway. Oregon is really, really nice though....
 

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Wait a minute, does the sales tax thing depend on the state you live in? Like I live in Ca and the sales tax is added in at the top of the contract, long before the downpayment trade-in is subtracted off at the bottom. Also, the sales tax itself is tax deductible at income tax time. So if you pay more sales tax it's not all to the bad. I went to an H&R Block once and they were only going to give me the table amount sales tax deduction. Then I said that I usually have a CPA do my returns, and the sales tax on large purchases, like cars, is also tax deductible (in addition to table amount). She double checked and was surprised to see that I was right. (Maybe tax laws have changed since then - not sure.)
Yes, it is state-dependent (and sometimes local).

I live in Florida, and sales tax is calculated at 6% (plus any local add ons) at the price of the sales car on the top of the sales contract in a straight sale. I can't recall if you pay taxes on dealer fees, but I don't think so. EDIT: If you have a trade-in Florida, it reduces the price you are financing and isn't subject to sales tax for the difference. But you ARE taxes on rebates or incentives.

For a lease, in Florida at least you also pay state tax on any cap cost reduction which is usually the incentives or rebates as above (and it includes the federal tax rebate of $7,500 at time of sale since VW is giving it to you off the top), and then you pay use tax every month built into your payment. My current ICE Audi Q5 has a monthly contribution of $40.94 to the lovely state of Florida for use tax. And then if you buy the car at the end of the lease, I'm pretty sure you pay sales tax again just as if you were buying the car used, because at that point you ARE effectively buying a used car from the leasing company.

Whether you can take that off your state income tax depends on your state, tax situation, etc. Florida has no income tax, so it don't matter here even if they did allow you to tax a deduction for state sales tax. LOL I don't think I've ever lived in a state (4 now and counting) where you got to deduct state sales tax from state income tax.

You CAN however claim state sales tax as a deduction on your Federal return.... and you could try to add up all the sales tax you paid for the year, even on a big purchase for Federal deduction purposes, but given that sales tax is on Schedule A, I'm gonna bet most people don't get over the standard deduction these days to even worry about it.

EDIT: Oh, and at least in Florida anyhow, private sales are also subject to sale tax. You will pay it when you go to the tax office to transfer the title and tags.
 

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I think for California, you guys are best to use the DMV site apparently. LOL

Vehicle Registration & Licensing Fee Calculators - California DMV
Thanks on that, I just tried the above calculator and it computed the same fees I was charged for sales tax and total registration when I bought my ID.4. The dealers here know what they can get away with, so no worries on registration fees and sales tax calculations in Ca nowadays.
But when I bought a new '81 Saporro in Ca., at a time not long after they started calculating fees with a computer program, my TI calculator showed they were overcharging me about $60+ for sales tax. They expressed surprise, apologized, and said that they weren't aware of that and that it was the first time anyone had noticed. I surmised they couldn't be that stupid and maybe it was deliberate. Oh, you mentioned Florida above. I lived there for maybe 2 years and attended Sunrise JHS and Pompano Beach HS. (Way back then they were not good schools, but the area was truly great).
 

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No, I must be weirder than weird because I lived in 5 other states and one other country before I settled in Ca.
It turns out 6 other states besides Ca do not reduce sales tax for trade-ins, and nobody ever cracks jokes about those states - they don't dare with some of them, ha, ha. Anyway, who can say anything bad about Hawaii for example?
This is from Zacks (the first part supports your case and the second part mine):
"Trade-in Value Increase
Another way to view the sales tax reduction from trading a car -- and a favorite view of car dealers -- is that the reduced sales tax can be equated to a higher value for your trade-in. If the dealer gives you $10,000 for your trade and trading the car reduces your sales tax bill by $800, you are in effect receiving $10,800 for the car you are trading. If you sold the car on your own, you would not receive the sales tax savings, so would have to sell the car for more than $10,800 to come out ahead of going the trade-in route.
States without Tax Benefit
The state of Oregon has no sales tax, so if you live in that state and buy a car, the tax calculation is easy -- zero. In seven other states, there is no credit or sales tax reduction when you trade in a car. Those states are California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia. If you live in one of these states you calculate sales tax by multiplying the full new car purchase price times the local sales tax rate".

Hmmm, I'll have to ponder the rest of what you said as I don't do my own taxes, so I may have used a wrong word or two in previous post. All I know is that when I itemize deductions I pay less taxes than if I were to take the standard deduction, even with recent tax law changes. And sales tax and property tax are part of my itemized deductions. Maybe I should move to Oregon where things are simpler.... Nah, we're getting into cold season, and I already bought my Pro anyway. Oregon is really, really nice though....
The statement about Oregon is no longer true. As of a few years ago, you have to pay sales tax on a new car purchase. Yes, it isn't much 0.5%, but you still have to pay it.
 

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States without Tax Benefit
The state of Oregon has no sales tax, so if you live in that state and buy a car, the tax calculation is easy -- zero. In seven other states, there is no credit or sales tax reduction when you trade in a car. Those states are California, Hawaii, Kentucky, Maryland, Michigan, Montana and Virginia. If you live in one of these states you calculate sales tax by multiplying the full new car purchase price times the local sales tax rate".
Maryland now credits trade in against the 6% excise tax. Must be same transaction at a dealer. Typically the dealer offer will not match a carmax offer because they know they have an advantage. Say carmax offers you $10,000 which if the dealer matches means $600 tax savings. The dealer knows this and may offer $9,700 for a tax savings of $582 which beats $10k no tax savings. The rub is the trade in is still worth $10k but the dealer only gave you $9700. Hope I did a good job explaining that.
 

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Thanks on that, I just tried the above calculator and it computed the same fees I was charged for sales tax and total registration when I bought my ID.4. The dealers here know what they can get away with, so no worries on registration fees and sales tax calculations in Ca nowadays.
But when I bought a new '81 Saporro in Ca., at a time not long after they started calculating fees with a computer program, my TI calculator showed they were overcharging me about $60+ for sales tax. They expressed surprise, apologized, and said that they weren't aware of that and that it was the first time anyone had noticed. I surmised they couldn't be that stupid and maybe it was deliberate. Oh, you mentioned Florida above. I lived there for maybe 2 years and attended Sunrise JHS and Pompano Beach HS. (Way back then they were not good schools, but the area was truly great).
Cool. South Carolina, where I was prior to Florida, has the weirdest tax law on car purchases. Car sales tax on new cars is capped at like $500 no matter the cost of the car. You do pay annual property tax, which can be pretty steep.
 

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Cool. South Carolina, where I was prior to Florida, has the weirdest tax law on car purchases. Car sales tax on new cars is capped at like $500 no matter the cost of the car. You do pay annual property tax, which can be pretty steep.
That's a strange law alright - it favors the rich and burdens the poor. Whoever thinks this stuff up? It's fascinating that states have come up with so many different methods to tax car sales. 50 states and DC and some territories, and each one marches to its own drumbeat....
 

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Looks like thats for commercial vehicles, RVs, not regular passenger cars.
I wish, that applies to all vehicles. My kid lives in Oregon and he just hit with it last year. Where the posted page is hosted has the word businesses in the URL, which is somewhat unfortunate, but if you read the page, it pretty much lists all the criteria and a vehicle is in the very first box. Also, they tax the full amount, not a difference between trade in value and new purchase value.

Still better than WA state where I live, but I lived in OR for many many years.

 

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After waiting since I put in my reservation on 23-Sept-20 for my ID.4 Pro/S AWD, after my test drive today, 9-Oct-21, I have canceled my reservation and declined the car.


First the test drive- This is an awesome car!!! But it does have some issues. I have heard the AWD ID.4 referred to as the GTI of the EV world, I think that sums it up well. The car is very planted and stable, handles well especially considering how much it weights. The turning radius is a little larger than the 1st edition I drove, but not enough to matter in real world situations. Parking lot maneuvers were a breeze. I found the steering a bit too sensitive, the tiniest movement of the steering wheel would make a noticeable change in direction. I needed to pay strict attention to my driving at all times. It did not make for relaxing driving. I thought about it after I got home and realized that I never even thought to check to see what mode the car was in. Was it sport, comfort, eco, I have no idea. Pulling out of the dealer lot it was immediately obvious the car had more solid, responsive, acceleration than the 1st edition. Driving around town was pleasant, enjoyable, like the 1st edition. I went to get on the highway and as I was coming down the entrance ramp the car nose was just slightly in front of an 18 wheeler, who was not giving me an inch. I pressed the GO pedal and in no time I was well in front of the truck. :) Highway merging with the AWD version is absolutely a non issue, it just goes. I set the cruise control for 70, activated the LKA and let it run. Glanced at the speedo and noticed I was doing 75??? Rechecked the cruise setting and it was now set to 75?? Reset it to 70 and continued down the road. Car kept asking me to take over the steering. It took a bit to figure out how much holding of the wheel I had to do to keep the system happy. I let the LKA do its thing for a while, I didn鈥檛 like the way it kept wandering the car down the lane. A touch to the right, a touch to the left, repeat on down the road. After about 2-3 miles of that I couldn鈥檛 take it any more and just grabbed the wheel and steered the car myself. Then I found that the LKA was fighting me and it felt like I was drafting an 18 wheeler 5 feet behind the trailer. Like I was being buffeted all over the place. I turned off the LKA, much nicer and just ran with the cruise set to 70 for a while, no LKA. NIce. I turned off the cruise and just drove the car with minimum assistance. The car felt nice and stable, no clue how fast I was going, cars were passing me, I was passing nobody, I was just enjoying the ride and the scenery. Then I happened to glance at the speedo鈥 I was doing 80!!! I had no idea/clue I was going that fast. This car would easily get me in trouble. Somewhere in there I also figured out why my speed settings kept changing. I didn鈥檛 realize that the haptic buttons on the steering wheel were also sliders and I was apparently sliding my fingers over the controls changing the settings without realizing it. Some where during the test drive my back started to hurt. I spent a good deal of time sorting out the seat trying to get comfortable. Never really succeeded, tried out the seat massage to see if that would help. I didn鈥檛 like the seat massage and it didn鈥檛 help with my back pain. I think when I started out the lumbar support was at max and that is what caused me the pain that I never recovered from, my back was still sore the following morning. I felt that B mode deceleration/regeneration was greater in the AWD than it was in the 1st edition. The AWD version is definitely noisier/louder than the 1st edition I drove. According to the dB meter app on my phone, radio off, windows closed, same road same speed. The 1st edition averaged 74.8dB, AWD 77.8dB, my TDI Jetta 84.2dB. Indicating my Jetta is twice as loud as the 1st edition. There might maybe be more motor noise with the AWD vs the 1st edition, but 95% of the difference is the noisier tires on the AWD. I didn鈥檛 remember to take note of what tires were on the AWD. Pulling away from a stop, the acceleration was very nice. The salesman suggested I get going about 10 mph and then punch it and see what happened. I was caught off guard and it literally snapped my head back. I was not expecting that.


Why I rejected the car- There were several reasons. I didn鈥檛 like the lies the salesman told me. Didn鈥檛 like the trade-in the dealership gave me. Carvana offered me $14,900 for my Jetta, using the link from the VW Portal to KBB, KBB retail trade-in value was $12,800 and dealer offered me $10,500. I found the LKA, 鈥榮elf driving鈥 mode more annoying than helpful. I am moving from Maine to rural Virginia and won鈥檛 need the AWD or the performance that comes with it. The key in my decision was that I was not going to spend $50K for a vehicle that might cause me back pain. I think once I get moved and settled in, I will look again at a RWD Pro/S or maybe a Buzz if it ever comes out.

I wanted to understand the cost of the ID4 ProS AWD. The ProS AWD lease offers are NOT competitive especially in the areas where dealers are marking up...
As a reservation holder, I have lost interest mainly because there are similar cars at lower prices.
I have driven [over a day] the ID4 and I didn't the RWD very compelling.
So maybe someone has looked into this. the ID4 ProS AWD is over $500 [VW USA] lease program. The residuals are low [less than 50%] and the lease borrowing rate is average.
Here are some competitors
- Polestar 2 - smaller but the FWD and AWD are cheaper than the ID4. You get similar equipment but the lease on the Polestar 2 AWD is much better ~ $505, $4k down, 39/10k.
The cost can be lower at the dealer.. Much faster but lower range, similar charging curve, similar equipment except
  • Hyundai Ionic5 has a smaller battery option and better or similar charging curve
  • Kia EV6 has a smaller battery option and better or similar charging curve
  • Audi Q4 e-tron -it will be interesting to see how/if Audi competes here. If Audi Q4 e-tron is $30+ per month than VW ID4, I will likely cancel my ID4 AWD
  • Mustang MachE, the Select AWD is cheaper (< $500 per mo) but smaller pack still gets over 220mi of range. I have also driven and I only prefer ID4 charging curve
  • Merc EQB - this is next year but some of us are 6 month lead time for ID4 AWD..
  • nissan
  • toyota

current Kia/Hyundai/Tesla products may also compete

I am waiting the get an idea of the cost/availability of the Kia/Hyundai/Audi products. Once those are available on dealer lots, I assume ID4 will get pressure to lower prices. Assuming we return to more availability on dealer lots. The Polestar2 is very competitive and even though it is smaller [for my needs], it will harder to keep waiting for the ID4 AWD.

Let's see

I have tried to read the vs. reviews to see what car competes best
 

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The residuals are low [less than 50%]
All EVs depreciate 50% in three years except for Teslas (that may change when new cars arrive on the market).

Polsestar 2 looks nice. Surprised it's cheaper... you mean lease-wise? The MSRP of it is $10K over the highest ID.4 trim. I guess the leaser is gambling that the depreciation won't be as bad as average.

Also none of your other cars listed are available: EV6, Ioniq 5, Q4 e-tron, etc... Try to find Mach-E under $5K over MSRP. How long are you willing to wait? I suspect 6 months for any of those cars at MSRP.
 

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Wait a minute, does the sales tax thing depend on the state you live in? Like I live in Ca and the sales tax is added in at the top of the contract, long before the downpayment trade-in is subtracted off at the bottom. Also, the sales tax itself is tax deductible at income tax time. So if you pay more sales tax it's not all to the bad. I went to an H&R Block once and they were only going to give me the table amount sales tax deduction. Then I said that I usually have a CPA do my returns, and the sales tax on large purchases, like cars, is also tax deductible (in addition to table amount). She double checked and was surprised to see that I was right. (Maybe tax laws have changed since then - not sure.)
It depends a bit on the states involved - I gather California wants it upfront. Back when I lived in Virginia, I once bought a car from a dealer in North Carolina. I didn't pay any sales tax in NC - I had to pay usual dealer fees, and they gave me a temporary tag and a pile of papers. I took that to the Virginia DMV, and paid Virginia sales tax at that point.

Virginia also has a "car tax" - the amount is a percentage of KBB for the car, and you have to pay it every year. Owning a late-model car can get to be kind of expensive, but the details vary a bit depending on where you have the car registered. Various people have tried tricks for getting out of paying for it (registering the car in a different state, for example), but they are known to look for that..

There is also an annual EV surcharge to the registration in Virginia. Not that bad, but it is definitely there.
 

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I wanted to understand the cost of the ID4 ProS AWD. The ProS AWD lease offers are NOT competitive especially in the areas where dealers are marking up...
As a reservation holder, I have lost interest mainly because there are similar cars at lower prices.
I have driven [over a day] the ID4 and I didn't the FWD very compelling.
So maybe someone has looked into this. the ID4 ProS AWD is over $500 [VW USA] lease program. The residuals are low [less than 50%] and the lease borrowing rate is average.
Here are some competitors
- Polestar 2 - smaller but the FWD and AWD are cheaper than the ID4. You get similar equipment but the lease on the Polestar 2 AWD is much better ~ $505, $4k down, 39/10k.
The cost can lower at the dealer.. Much faster but lower range, similar charging curve, same equipment except
  • Hyundai Ionic5 has a smaller battery option and better or similar charging curve
  • Kia EV6 has a smaller battery option and better or similar charging curve
  • Audi Q4 e-tron -it will be interesting to see how/if Audi competes here. If Audi Q4 e-tron is $30+ per month than VW ID4, I will likely cancel my ID4 AWD
  • Mustang MachE, the Select AWD is cheaper (< $500 per mo) but smaller pack still gets over 220mi of range. I have also driven and I only prefer ID4 charging curve
  • Merc EQB - this is next year but some of us are 6 month lead time for ID4 AWD..

current Kia/Hyundai/Tesla products may also compete

I am waiting the get an idea of the cost/availability of the Kia/Hyundai/Audi products. Once those are available on dealer lots, I assume ID4 will get pressure to lower prices. Assuming we return to more availability on dealer lots. The Polestar2 is very competitive and even though it is smaller [for my needs], it will harder to keep waiting for the ID4 AWD.

Let's see

I have tried to read the vs. reviews to see what car
Your post is a bit confusing to me, as nothing I see is cheaper to lease other than the Polestar 2? There is no FWD ID.4, only RWD and AWD.
  • Hyundai Ioniq 5 - No US pricing has been released (I know, I have an early reservation spot), but if you look at the pricing in Europe compared to the other models, it will NOT be cheaper than an ID.4. They say 'end of year', but I doubt it since it's been almost 6 weeks since they took early reservations without a peep.
  • Kia EV6 - Same comments as the Ioniq 5. Can't even place a preorder, who knows when it will be here.
  • Audi Q4 - The car is anywhere from $3k to $7k more than a comparable ID.4, which is anywhere from $50 a month to over $150 a month depending on option level. All reviews say it drives EXACTLY like the Audi, so the differences are limited to your preference for interior configuration, infotainment, and dealer networks. Same MEB platform, same batteries, same charging cycle, etc. Who knows when it will arrive officially. But having owned a current Audi now on lease, don't expect the lease residuals to be fantastic here either.
  • Polestar 2 - Only available in the US as an AWD and prices start at $60k at the moment. The FWD cheaper version won't be here until next year nor will the promised lower pricing...I do see the same lease option on their website that you quote for the current base PS2. Must mean Polestar is holding a higher residual. If you like it, then great! But it is quite a bit smaller than the ID.4 in interior volume.
  • Mach E - 4-6 month lead time unless you get lucky and get one off the lot. $3k more at base between ID.4 and Mach E RWD. Ford Options 'lease' for the same is almost $700 a month at $39k financed, $5k down, 12k a year. $7.5k Federal credit is totally on you if you qualify. Options isn't a lease, it's a finance program that lets you sell the car back with a balloon payment otherwise, so you are still paying like it's an amortizing loan.
  • EQB - Won't be here for another year, so who knows, but estimated pricing for C&D is north of $60k. Only likely to be a 'cheap' lease with a high residual.
So if lowest payment is the only thing you're looking at, then the Polestar does seem to have an edge. But everything else is currently either unknown (Hyundai/Kia/Audi/EQB) or significantly higher (Ford). I agree that the VW residuals are NOT the best however and that they are looking worse in comparison.

If you've got time to wait it out, then by all means do!
 

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Discussion Starter · #35 ·
The lease numbers for the AWD Pro/S I turned down were in the $750/month range, that was a no go for me. Dealer just showed me the bottom line numbers without any specifics.
 

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The lease numbers for the AWD Pro/S I turned down were in the $750/month range, that was a no go for me. Dealer just showed me the bottom line numbers without any specifics.
That must have been a no money down lease other than the $500 payment and the tax credit.

Here are some samples I have from a dealer based on a money factor that's a little off the lower rate right now. So I can see how you get there for sure based on current residuals. So they aren't cheap, no doubt about that.

I just don't know how you can get out there with the other mentioned cars when we have so little information about all of them except the Polestar and the Ford. One which is 'quoted' as cheaper (Polestar) and one which is a lot more expensive (Ford).

Font Material property Screenshot Parallel Number


Edit: this is for a maxed out AWD Pro S Statement, just to be clear.
 

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I should add in the cost of a Tesla Model Y to the list above, just to be complete.

Standardized to $0 down, 36 months, 12k miles as above VW example, and backing out Elon's own version of trickle-down economics of 'potential savings' for gas of $2600.

MY LR:
Font Screenshot Number Parallel Circle


MY Performance:
Font Screenshot Number Circle Terrestrial plant
Font Screenshot Number Parallel Circle
Font Screenshot Number Circle Terrestrial plant
 

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I don鈥檛 know about California, you guys are weird anyway 馃槃 but in all the states that I鈥檝e lived the sales tax is not deductible. That鈥檚 why it鈥檚 called double-taxation. You pay your income tax and whatever is left over is yours to spend, but you pay more tax on everything you buy. The only sales tax that is deductible from the adjusted gross income is the tax on the items that are deductible. Like if I buy a computer for my business and expense it out as a business expense, then the entire amount (including sales tax) can be deducted from my income to lower my adjusted gross income that I would pay income tax on.

In my state, I have to pay 7% sales tax on a vehicle purchase, and none of that is tax deductible unless I buy the vehicle for my business, but I will have to amortize it over the course of several years because you can鈥檛 deduct the entire value of a car in one year. I think the limit for that is an item that costs less than $2,500, which can be deducted in its entirety.

But for private car purchases, there is no tax deduction for the sales tax paid on the car purchase. Of course, the ID.4 has a $7,500 federal income tax credit, so if you owe more than $7,500 in federal tax, you can reduce the federal income tax by $7,500, which is more than the 7% sales tax on the $50,000 price of the AWD ID.4.
Local taxes are deductible from your Federal Income Tax if you are itemizing deductions. H&R Block has rather indifferently trained preparers and are usually just doing the standard deduction Cha-Cha and file it. In their defense the expansion of standard deductions has reduced the number of filers itemizing deductions so the person needing them is a Unicorn in their office.
Sales tax can be deducted as a business expense if the vehicle is owned or leased by a business.

Now limited to $10,000 for married or $5000 for single.

Pretty straightforward because the ST is levied on the whole amount because you are buying a whole 'nother product.
Sure, you paid ST on the first car. But that doesn't entitle one to rollover the residual values infinitely.

The weird tax thing in California is Prop 13 that caps property tax 1% of the purchase price in perpetuity with assessed values not to exceed a 2% increase annually.
Thus people who bought their homes years ago are paying peanuts compared to their neighbors who bought last month.
 

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The statement about Oregon is no longer true. As of a few years ago, you have to pay sales tax on a new car purchase. Yes, it isn't much 0.5%, but you still have to pay it.
Technically the tax is on the dealer. This was a bit of a sticking point for me in my purchase as the dealer presented it as a tax I'm obligated to pay, which is not the case and I find this dishonest. They are passing on their tax to me, fine - just say that, own it. In a different vehicle market, I would refuse to pay it, but no chance of that happening in the current market and I wasn't going to blow up my reservation over it.
 

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Local taxes are deductible from your Federal Income Tax if you are itemizing deductions. H&R Block has rather indifferently trained preparers and are usually just doing the standard deduction Cha-Cha and file it. In their defense the expansion of standard deductions has reduced the number of filers itemizing deductions so the person needing them is a Unicorn in their office.
Sales tax can be deducted as a business expense if the vehicle is owned or leased by a business.
Pretty straightforward because the ST is levied on the whole amount because you are buying a whole 'nother product.
Sure, you paid ST on the first car. But that doesn't entitle one to rollover the residual values infinitely.

The weird tax thing in California is Prop 13 that caps property tax 1% of the purchase price in perpetuity with assessed values not to exceed a 2% increase annually.
Thus people who bought their homes years ago are paying peanuts compared to their neighbors who bought last month.

Now limited to $10,000 for married or $5000 for single.
Sales tax is not deductible on the federal return. Only income tax is deductible.
 
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