Trade-ins

From the 2024 DOR Tax Exemption Study

82.08.010(1)(a) - Trade-ins Description The definition of selling price excludes the value of trade-ins. This means sales tax is collected on the price after the value of the trade-in is deducted. To qualify, the used items must be accepted by the vendor and be of "like-kind." For example, a person purchasing a new French horn may trade in a used trombone since both are musical instruments. Purpose To encourage purchases of new items, especially motor vehicles. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $254.130 $263.670 $272.980 $282.620 Local Taxes $109.660 $113.780 $117.800 $121.960 Repeal of Repealing this deduction would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $241.700 $272.980 $282.620 Local Taxes $0.000 $104.300 $117.800 $121.960 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the taxable sales growth rate reflected in the Economic and Revenue Forecast Council's March 2023 forecast. - Local revenue estimates use the statewide average local sales and use tax rat