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It's a bummer, but not sure if you ever bought an iPhone or smartphone along with a plan. The iPhone is $600 retail, but $199 after rebate. In California, you pay the sales tax on the $600.

Not all states adhere to this rule. With a car purchase, the rebate is applied not as a discount, but more of a down payment, so the sales price is the same, regardless of how much the rebate is. Therefore, you would pay sales tax on the price of the vehicle.

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Q: Do you pay taxes on the price of a new car before or after the rebates are taken?
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