As far as I know, all discounts are applied before taxes unless your state is offering some sort of tax abatement. Generally, the lower the car price, the lower the sales/excise/titling (depending on which state you live in) tax, although some jurisdictions base part of their taxes on the car's weight. Dealers and manufacturers are fully within their bounds to raise/lower the car price. They have no authority to alter the tax rate. That lack of authority is why discounts are before applying the tax.
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Cheers,
Tony
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'07, e92 335i, Sparkling Graphite, Coral Leather, Aluminum, 6-speed
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