Cash for clunkers may have ended, but a sales tax issue raised by this program will carry on.
This particular issue involves Massachusetts residents who purchase motor vehicles or boats from out-of-state dealers, which is not all that uncommon.
Please be advised that if you purchase a boat or vehicle from an out-of-state dealer the sales tax calculation will not allow the value of the trade in unless the dealer has already registered as a Massachusetts registered vendor.
If the vendor is not so registered, you will pay sales tax on the purchase price of the vehicle/boat without factoring the value of the trade in.
However, to register as a Massachusetts vendor is painless, and, equally important, free. Have the dealer go here to register. After that is done and you make your purchase, you will pay sales tax on the net sales price due, which reflects the value of the trade in. On a trade of $3,000 that will save you $187.50 in sales tax.
Please keep this in mind so you are not surprised at the Registry of Motor Vehicles or at boat registration when you attempt to register and title your new vehicle.
You may contact Dennis Buckley, Taxpayer Advocate, here, with your questions.