280-20-70 R.I. Code R. § 28.9

Current through June 20, 2024

Section 280-RICR-20-70-28.9 - Trade-In Deductions

A. R.I. Gen. Laws § 44-18-30(23) allows for a trade-in allowance on an automobile given by the buyer in trade to the seller of an automobile, towards the purchase of a new or used automobile. A motor home is treated as a private passenger vehicle which qualifies for the trade-in allowance.

1. EXAMPLE 1:

A customer purchases an automobile from a dealership and trades in an automobile to the dealer (seller). The trade in allowance is deducted from the sales price in determining the amount of the sale subject to tax.

2. EXAMPLE 2:

A customer purchases an automobile from a dealership and trades in a truck to the dealer (seller). A deduction for the trade allowance is not allowed from the sales price in determining the amount of the sale subject to tax, since the vehicle traded in is a truck.

3. EXAMPLE 3:

A customer purchases an automobile from a dealership and trades in an automobile to the dealer (seller). In addition, the customer receives a manufacturer's rebate on the purchase of the automobile. Both the trade in allowance and the amount the manufacturer's rebate are deducted from the sales price in determining the amount of the sale subject to tax.

280 R.I. Code R. § 280-RICR-20-70-28.9