Destination Charge - How is it calculated?

[sub]

Is anyone know if they have to have evidence to justify the fee as being at all related to their transportation costs?

Could Rivian have a $20,000 destination fee and lower the MSRP by $20,000 to keep the MRSP below 80k tax credit limit while still bringing in the same total amount of revenue?

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[moosetags]

We took delivery of our R1T at the Factory in Normal. The $1,800 delivery charge is the same.

Brian

 

[VSG]

Is anyone know if they have to have evidence to justify the fee as being at all related to their transportation costs?

The price of a product has very little to do with actual costs, unless you're talking about commodities. That's contrary to what many people believe, but it's always been that way. The price of a product is what people are willing to pay for that product. You can have a high price for something that's cheap to make, and you can have a price just a few percent above cost for a product that's expensive to make.

A destination charge doesn't have anything to do with actual transportation costs. A manufacturer can set the price to be the average transportation cost, or they can set the price to be lower than the average, or they can set the price to be higher than the average. They can also include things other than transportation costs when calculating the destination charge.

Could Rivian have a $20,000 destination fee and lower the MSRP by $20,000 to keep the MRSP below 80k tax credit limit while still bringing in the same total amount of revenue?

I think within reason, yes they have the ability to collect some of their profit via destination charges. But with the extreme example you give, it looks more like a tax evasion scheme than a destination charge, so I imagine the lawyers and the IRS might have something to say about it. Compare that with an eBay seller charging $0.01 for the item plus $250 for shipping, in order to avoid paying eBay a percentage of the sales price.

 

[Gee Bee]

To reduce your tax liability, start a llc in a state with no sales tax , register in that state , then move registration to another state .

It’s all 100% deduction with a llc .

Or
Option is to finance from your house equity, to pay and deduct from your taxes on auto purchase, there is a difference between having a cpa over a tax accountant.

GB

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