[speeddeacon]

When you go to a retail store and buy something marked 25% off, do you get that discount on the sales tax too? No.

Sales tax varies greatly by state and if the tax is net of trade or not so it could be comparing apples to oranges. MSRP is standard across the country and discount from it would be valid for comparison. For example, my state has a 3% stales tax on new car sales. If the car sold for $40000, assuming no trade, the sales tax would be $1200. So if I wanted to include a 5% discount from the dealer on tax to, it would be a whopping $60. Sure you could sweat $60, or maybe they throw in a key ring or something.

Then there are the fees, does the discount apply to those?

I think the standard quote of discount percentage is largely off MSRP because most people understand the variables, but I could be wrong.