View Single Post
      03-21-2013, 10:44 AM   #9
BCA
Captain
21
Rep
793
Posts

Drives: 2015 M3
Join Date: Feb 2006
Location: Houston, TX

iTrader: (1)

It varies by state but I think you generally always have to pay sales tax on the residual if you are buying at lease-end. This is because you are buying the car from BMWFS (lessor), which is a taxable event because it results in a name change on the title. In most states, that doesn't really equate to double taxation because during the lease term, you've only paid sales tax on your payments, not the residual.

If you are unlucky enough to live in Illinois or Texas (like me), you pay FULL sales tax at lease initiation AND pay tax on the residual again if you buy the car at lease-end. That's why they offer Owner's Choice financing here, which I just did for the first time on my current M3. It's basically just a way to avoid that double taxation by structuring it as a purchase from the beginning so that purchasing at end of term is not a taxable event (because my name is already on the title).
__________________
2017 Porsche 911 Carrera S
2019 Porsche Cayenne

Past BMWs: 2015 M3, 2014 550i, 2013 M3 ZCP, 2012 535i, 2011 E90 335i, 2009 E90 M3, 2008 X5, 2006 330i, 2004 330i
Appreciate 0