Any rebate, regardless of origin, is deducted from the sales price of a motor vehicle before calculating the tax.
The rebate must have a fixed value at the time of purchase.
The rebate may be:
- Shown on the purchase agreement as a reduction in the vehicle purchase price
- Applied as a down payment
- Refunded directly to the customer
The deduction applies to manufacturers’ rebates and rebates issued by third parties who entered into an agreement with vehicle manufacturers.
A credit card company offers car rebates as an incentive for buyers to use their credit card. The credit card company and vehicle manufacturer entered into a third-party agreement to offer the rebate. The rebate is deducted from the taxable sales price of the vehicle.
Note: Rebates from off-road vehicles – such as watercraft, all-terrain vehicles, and snowmobiles – do not reduce the sales price of a motor vehicle before calculating sales tax.