No, your state rebate is not taxable.  Generally, money received from the state as a credit, grant, refund or rebate is not taxable.

 The primary exception to this is if you claim an itemized deduction and then receive a refund of some of the taxes you claimed as a deduction on your itemized return or if you received additional interest on a refund from the government.  In this case, the following year, you would need to claim the refund as income since you took a deduction for it.  Otherwise, payments from the state are not taxed by the federal government or vice versa.