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Old 09-07-2020, 06:12 PM
 
2 posts, read 354 times
Reputation: 10

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I've been told by 6 county tax assessors in Lubbock County that my tax to register a leased vehicle will be 57% of the lease. Has anyone EVER been charged a tax that high for ANYTHING? How can that possibly be accurate?

I took over a lease on a BMW x2 through swapalease.com. The remainder of the lease is for 15 months at $230/month = $3,450 plus $1,500 downpayment. The original lease was in Nevada and we had to transport it to Texas on a temporary tag.

The county tax office is adamant that in order to register the vehicle I need to pay them sales tax for the VALUE of the vehicle, $33,000.

In other words, 57% of what I am paying on the lease.

HOW CAN THIS BE RIGHT???
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Old 09-08-2020, 07:15 AM
 
Location: Houston/Brenham
4,594 posts, read 5,435,177 times
Reputation: 8863
Quote:
Originally Posted by bnity View Post
HOW CAN THIS BE RIGHT???
It's correct, because you are only paying PART of the lease, not the full lease. But registration is based on the FULL value of a vehicle, not part of it.

The state is not involved in your lease, and doesn't care how much it is for, or how long it lasts, or what the monthly is, or what the deposit is. They care about the current value of the vehicle.

Let's take an extreme example: You lease a $40,000 car. It has a turn-in value of $15,000, so you are "leasing" $25,000 worth of car. You put $24,000 down, and agree to pay $30/month for 36 months.

Now you let someone take over that lease right away, and they go to register it. The state says you owe $2500 to register, but you go "I only owe $1080 in lease payments, how can the tax be more than the lease?"

That's why the state ALWAYS taxes the current value, to avoid shenanigans.
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Old 09-08-2020, 11:24 AM
 
2 posts, read 354 times
Reputation: 10
Thank you so much for the reply. This is fascinating, honestly. This is the first time I have leased a vehicle and I can't see myself doing it a second time. It's been nothing but a pain and full of negative surprises. Thanks again!
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Old 09-08-2020, 01:15 PM
 
Location: Houston/Brenham
4,594 posts, read 5,435,177 times
Reputation: 8863
Quote:
Originally Posted by bnity View Post
Thank you so much for the reply. This is fascinating, honestly. This is the first time I have leased a vehicle and I can't see myself doing it a second time. It's been nothing but a pain and full of negative surprises. Thanks again!
Glad it was helpful. As far as car leases, there are pros & cons (I've done both), but the real issue here is you took over a lease, and moved it to Texas. Double whammy! Otherwise, it wouldn't have been any problem.

Leasing from scratch, and in Texas to start, and you wouldn't see any additional costs.
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