It depends upon the state. Some states to not require the purchaser to pay sales tax on the entire selling price if a similar vehicel is traded in.
For example, see (for Ohio)
http://www.brunercox.com/ohio-sales-tax-trade-in-allowance/
You have not said what the applicable sales tax RATE is in the state where the vehice was sold.
1. What is the total sales tax to be paid in 2012 on the purchase of a 2012 passenger vehicle with a selling price of $17,000 and a $2,000 trade-in allowance?
1 answer