In Kentucky you pay tax on the sales price of the car (must be close to sticker) regardless of your trade-ins value.
Thus you could trade in a $30,000 car for a $20,000 car and still pay tax on the $20,000. Tax in Kentucky is 6 percent. That would be $1,200 though you traded for less than you had.
Kentucky once taxed only the difference but realized how much revenue was being lost by not taxing full sale price.
That means you are taxed over and over again if you trade often.
sucks. My dealer says the state makes more off his cars than he does. He is probably right.
Thus you could trade in a $30,000 car for a $20,000 car and still pay tax on the $20,000. Tax in Kentucky is 6 percent. That would be $1,200 though you traded for less than you had.
Kentucky once taxed only the difference but realized how much revenue was being lost by not taxing full sale price.
That means you are taxed over and over again if you trade often.
sucks. My dealer says the state makes more off his cars than he does. He is probably right.