so my wifes car was totaled earlier this year.
my understanding is if you trade a car in you can save taxes on the trade in amount towards your new car.
how does that work if you got a totaled car check from insurance? or can you even do anything about that?

If you trade in a car, the amount you pay in taxes is reduced by the amount of tax applicable to what they paid you on the trade in. If you have nothing to trade in, you'll pay tax on the full purchase amount.

......so my wifes car was totaled earlier this year.......


In NY when the insurance company pays you for a totaled car they include the sales tax on that amount.

Correct. In some states, it's required to be paid as part of the total loss settlement. TX, NY, and many others are that way. In IL and OH, the state gives the insurance company the option to pay it at the time of settlement, or after the person replaces the totaled vehicle if done so within 30 days of settlement. In South Carolina, tax is owed but the amount owed is capped at $500. He's asking about offsetting the tax paid on the replacement vehicle though. Only way to do that is with a trade-in. But, if he was paid the sales tax on the totaled vehicle, he's in the same position as he would be if he were trading the car in pre-loss.

interesting, they might have, paid the tax, I will have to go back and check.
Thanks.

I'm in Missouri. August of 2021 my 2010 Challenger was totaled. I received an insurance settlement on it. I then had it was either 90 or 120 days (don't remember) to use that amount as an offset on the sales tax I paid on the replacement Challenger. I did that and only paid sales tax on the difference. Insurance company gave me letter which took to the DMV when I registered and paid tax on the replacement car. In effect, you sold your wrecked car to the insurance company instead of selling the unwrecked car to an individual, or trading it in to a dealer. Not sure of your state laws, but you should be able to use the settlement as a credit on the replacement car as long as the time period to do so has not expired.

I did find the line item for tax, so I guess they did pay and I just didn't notice. Thanks for the help.

MO has no statutory requirement regarding sales tax, which is why the insurer chose to handle it the way that they did in your situation. Not every insurer in MO will do so, and that's also not how it is handled elsewhere. "You should be able to..." is not correct.

Thanks for the clarification...

Dealer here.

Tax rules vary state to state regards tax savings on trade ins.
Here in Michigan, we have 6% sales tax. The tax savings on trades has ramped up from if I remember right 1500 to the current 8,000.
So, in other words, if the value of your trade is 8k or more, you get a tax savings of 480 bucks, 6% of 8,000.

Here in Il they passed a cap a few years ago @ $10,000 but this year they repealed it and there's no limit.