That may be the case when doing a trade in-store for an in-stock phone, but wasn't the case when preordering. I paid tax on the full amount of the new phones. With Apple the trade in credit was taken off the total and tax would've been on the difference. Unfortunately Apple chooses not to recognize the 55+ Magenta Max plans as valid for the promo so I did my order via T-Mobile.
@Cinimod1000 the program is intended to keep customers with T-Mobile and keep them on the higher tier service plan. So they spread the rebate out over two years - your bill goes up but is then offset by credits. You shouldn't end up paying any more than your current bill, though you would pay sales tax up front. At least it's just 24 months and not 36...