Sales tax if trading in an embroidery machine.
 

I live in NC and am interested in trading in my Babylock Ellissimo Gold II for the new Babylock Destiny. But....the dealer tells me I would be charged sales tax on the total selling price of the new machine, not the difference. Do any of you have information or experience about this?
Thanks,
Jo Ann

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.

Sorry, I have never traded in a DSM. Just doesn't sound right.

I think you are exactly right and for the reasons you stated. I am just trying to find a way to save $700.
Thanks,
Jo Ann

Yep, it figures. Taxes are taxes. No way around them.

they get you coming or going, never heard of this one.

And if the dealer sells the machine I trade in (that I have already paid taxes on) they will collect sales tax on that too, again.
Jo Ann

Unfortunately, Jo Ann, that is the way NC is currently set up. If I am not mistaken, you have to pay full sales tax on a vehicle in NC too. I do believe there is still a cap (max) on them, but nevertheless...
BTW-my sis and aunt both live in Seven Lakes!

Goodness....small world. Are your sister and aunt into sewing, quilting, embroidery, etc?l We should get together.
Jo Ann

Think of your old machine as a gift card to be used as partial payment for your new machine.