Sales Tax on a vehicle Trade-in?

[Jessica023]

What is the name of your state? New York or Connecticut

I'm not sure how Tax laws apply to when you trade-in your vehicle in the purchase of a new vehicle. However, I've been told by another dealership in NY state that it is illegal to apply sales tax to a trade-in. I'm not sure if that rule applies in Connecticut (where I live), however it shouldn't apply because I bought the car in NY.

Can anyone tell me if it is in fact illegal to apply sales tax on a vehicle trade-in? Thanks.

[Snipes5]

We'll need a better explanation and some details, please.

Do you mean that you traded in a vehicle and someone charged you sales tax for doing so?

Snipes

[Jessica023]

Yes. I went to buy a new car, and they quoted me a specific amount for my trade in. Then on the paperwork they reduced the value by about $600 and said that the reduction was for the sales tax that they need to apply to the trade-in. Of course this sales tax was never mentioned to me prior to the financial paperwork being written up.

Now I just received a call from them stating that they need me to sign a form that they forgot to have me sign on the day I bought the car. It's a financial agreement. Unless I sign this form they can not make up a loan for me, and they also can not pay off my previous loan on my old car... Does this mean that I'm off the hook because of financial rejection. Technically I still own my trade in, because they can not obtain the title. In CT the lienholder holds the title until you pay off the car fully. Since the current loan is in my name. They can't obtain ownership of my trade. And since they can't make a loan agreement for me through their company, then I don't have to pay for the new car I got from them.... What can I do here?

Thanks for any help.

[Snipes5]

This is not a tax question. Sounds like they are feeding you a line of crap.

Snipes