That’s because while Pontiac agreed to pay for most of the local charges — things like state sales tax and licensing fees — the recipients have to report the cars as income once tax time comes.

By adding $28,500 to someone’s income, it can push them into a higher tax bracket — which means they will have to pay about 25 percent or more of the car’s value in taxes. And for a nearly $30,000 car, that probably means, for most of the recipients, shelling out $7,125 for the “free car.”

And if you live in Illinois, you can expect to tack on another 3 percent or so in state income taxes. (full article)