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In Washington State, and perhaps others, the value of a trade-in is deducted from the purchase price when calculating the sales tax amount. If you buy a new vehicle for $100,000, you owe 9% sales tax on $100,000. In contrast, if you trade in a vehicle for $80,000, you owe 9% sales tax on just $20,000. It can make a huge difference on how much tax you pay.