Taxing your trade-in
would be a bad idea.
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Your Wisconsin Trade-in Credit
HOW IT WORKS NOW
Ever since Wisconsin first enacted a sales tax in 1962, our state's consumers have received a sales tax credit for the value of a vehicle they trade in. That means you pay tax on the real value of the deal: the difference in value between the vehicle you’re buying and the one you’re trading in — not on the whole price of the purchased vehicle without subtracting your trade-in.
WHAT YOU SAVE
For example, when you buy a $25,000 vehicle and trade in another valued at $10,000, you pay the state’s 5 percent sales tax only on the $15,000 difference — for a savings of $500.
THE CONCERN
Searching for new revenue, some state lawmakers have considered eliminating the trade-in credit before but left it intact. Taking your credit away could be a means of extracting as much as $100 million more per year from Wisconsin taxpayers.
Searching for new revenue, some state lawmakers have considered eliminating the trade-in credit before but left it intact. Taking your credit away could be a means of extracting as much as $100 million more per year from Wisconsin taxpayers.
YOUR WISCONSIN VEHICLE TRADE-IN CREDIT MAKES GOOD SENSE:
- You paid sales tax on your trade-in when you bought it. Why pay on it again? That would unfair double taxation.
- We’ve been through some tough times; now is no time to increase your costs by taking away the trade-in credit.
- If you're looking to buy a vehicle that gets better gas mileage and is easier on the environment, eliminating the trade-in credit would make that more expensive.
- Axing the trade-in credit would be a major tax increase.