States That Allow Trade-in Tax Credit
For example, if your new car costs $20,000 and you have a trade-in worth $5,000, then you only have to pay sales tax on $15,000. If your sales tax rate is 10%, you're looking at savings of $500 in this particular case.
The following states currently allow a tax credit on your trade-in as of January 2011:
* The Potential Savings is based on a trade-in worth $5,000
|State||Maximum Tax Rate||Potential Savings *|
The only states that DO NOT currently give a tax credit as of February 2019 are:
District of Columbia
If you live in one of these states, you have more incentive to sell your car to a private party.
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