Are rebates taxed when buying a car?

It depends on the state. In some states a manufacturer rebate reduces the taxable price, while in others you pay tax on the price before the rebate is applied, even though the rebate lowers what you owe. Dealer discounts are usually treated differently from manufacturer rebates for tax purposes. Ask the dealer to show how tax was calculated on the itemized quote, and check your state's revenue department guidance if the numbers don't match what you expected.