This is probably because when he bought the machine wholesale he has a tax # from the state and is exempt from the tax and passes that on to you then he has to pay it to the state on a monthly or quarterly report. They don't care about the trade in like a car. He is not making any money on the tax he charges you he has to save that and pay it out. I have done accounting all my life and this how it works in AZ. I hope this helps you understand. When and if he sells your trade in I don't know how that works.