The Car Buying Guide for Extreme Savers

List of States That Do Not Tax Car Incentives

If you're lucky enough to live in a state that doesn't tax car incentives, you could save a few hundred dollars.

For example, if your state has a tax rate of 7% and there's a cash rebate of $3,500, you're looking at a savings of $245.

Here are the states that do not tax rebates:

  • Alaska
  • Arizona
  • Delaware
  • Iowa
  • Kentucky
  • Louisiana
  • Massachusetts
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Hampshire
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • Texas
  • Utah
  • Vermont
  • Wyoming

On a similar note, you should check to see if your state also taxes your trade-in allowance.

My Recommendation for New Car Shoppers

TrueCar No-Haggle, CarsDirect, and RydeShopper are the quickest way to see the lowest prices available on new cars in your area. Both tools provide upfront prices from local dealers, and the deals are usually really good. It should be the first step you take when negotiating car prices. You should follow that up with my checklist to make sure you get the best possible deal.
- Gregg Fidan

Gregg Fidan

About the Author: Gregg Fidan

Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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