I currently live in a state that doesn't allow a trade-in tax credit and I am considering buying a used car that resides in a state that does. I will probably trade in my car as part of the purchase, which raised a couple questions to me that I couldn't find answers for online:
- I am assuming that my state's tax policy applies, meaning I would pay my state's car sales tax on the full purchase price of the purchased car, and my trade-in value is irrelevant. Is this correct?
- If the dealer lowers the price to account for the trade-in, is that essentially the same as receiving the trade-in credit? Is this even possible?