Lease Transfer ??

Derek · #1 07-21-2008, 11:13 PM

We have our 07 525 listed on swapalease and live in Texas. Texas charges sales tax upfront on the entire cost of the vehicle. I have located a potential buyer but we have questions about how the vehicle will be taxed when it is transferred. Texas has implemented a "blue book" type valuation for vehicles from which you are taxed on at a minimum. My question is what would the car be valued at since it isn't technically a sale? My guess is it would go by the value stated on their site rather. Has anyone in Texas done a lease transfer? I plan on calling the DMV tomorrow but who knows what story I'll get then as I'm guessing they don't see a lot of lease transfers.

Thanks in advance.....

B-Line · #2 07-22-2008, 02:07 AM

I don't know TX. but it seems you are confusing tax laws for purchase and lease.

If you lease a vehicle, you don't pay tax on the cost of the vehicle, you pay tax on the amount of vehicle you use. IE, you have a 58% residual, you pay tax only on the 42% of the vehicle you use.

The tax is generally factored into the lease payment, which means, that when the lease transfers, the "buyer" should probably just assume the payments you were making, plus the taxes, which are included in the payment.

But again, I don't know for sure that this is true for Texas. but it is true for everywhere other state I have lived in.

Derek · #3 07-22-2008, 09:12 AM

You are correct in that most states do it this way but TX taxes a lease vehicle just like a purchased vehicle. When I leased the car I paid sales tax (all ~$2,700 of it) and it was rolled into the lease. It is not broken out from the lease payment like other states. When I got the first set of docs from BMW it stated that the following states would charge sales tax again (IL, MD, NJ, NY, OH, TX). I'm just not sure what value they will assign the car.... Not a very lease friendly state.............

Quote:

Originally Posted by B-Line

I don't know TX. but it seems you are confusing tax laws for purchase and lease.

If you lease a vehicle, you don't pay tax on the cost of the vehicle, you pay tax on the amount of vehicle you use. IE, you have a 58% residual, you pay tax only on the 42% of the vehicle you use.

The tax is generally factored into the lease payment, which means, that when the lease transfers, the "buyer" should probably just assume the payments you were making, plus the taxes, which are included in the payment.

But again, I don't know for sure that this is true for Texas. but it is true for everywhere other state I have lived in.