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      07-11-2012, 03:35 PM   #1
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reclaiming tax on lease assumption

In the process of transferring lease to someone. Ive had the car for 1 year and paid full tax up front(I'm from nj). After I transfer is there a way to reclaim the tax I paid up front since I only had car for 1 year. I'm doubtful there is.....
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      07-11-2012, 03:39 PM   #2
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I wouldn't think so. every state is different. Here is CA we pay tax only on the monthly payment. I guess in NJ you pay tax on the leased portion all up front? I would think you would have to work work that out with the person taking the lease over. have them pay you 2/3 of the tax assuming it is a 3 year lease
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      07-11-2012, 03:47 PM   #3
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Yes Nj NY Tx, tax is paid up front. I like your suggestion but would be a tough bargaining chip.
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      07-11-2012, 03:55 PM   #4
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Quote:
Originally Posted by amirz1000 View Post
I wouldn't think so. every state is different. Here is CA we pay tax only on the monthly payment. I guess in NJ you pay tax on the leased portion all up front? I would think you would have to work work that out with the person taking the lease over. have them pay you 2/3 of the tax assuming it is a 3 year lease
I hope that was discussed before the lease takeover was done
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      07-11-2012, 03:58 PM   #5
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Originally Posted by Lunker View Post
Yes Nj NY Tx, tax is paid up front. I like your suggestion but would be a tough bargaining chip.
You might have to be out that money then. i doubt the state would give any kind of refund since that money is still owed by someone.
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      07-11-2012, 05:10 PM   #6
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Originally Posted by UnaBomber View Post
I hope that was discussed before the lease takeover was done
We discussed it briefly, when he assumes the lease he will have to pay his own tax from Boston so don't think I have much to bargain for.
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      07-11-2012, 06:22 PM   #7
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NJ seriously charges tax on the full price of a leased car with no clawback? doesn't sound right...
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      07-11-2012, 06:36 PM   #8
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Quote:
Originally Posted by mdosu
NJ seriously charges tax on the full price of a leased car with no clawback? doesn't sound right...
I would think the taxed amount would be price of car and money factor minus residual. But lots of states do that. Taxing the monthly amount is the same just spread out over the term of the lease.

*edit - basically you're taxed on the depreciated amount. They just collect it up front

Last edited by amirz1000; 07-11-2012 at 06:42 PM.
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      07-11-2012, 08:04 PM   #9
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Do you mean sales tax or property tax? It probably depends on the state, but I have leased in MA and CT and have paid sales tax monthly to BmwFS as part of my payment. In both states you have to separately pay to the town or city a property tax or excise tax annually which is based on the value of the car. That tax will also show up on your bill from BMW FS and will be billed by your town as one lump sum. If you are talking about property tax, I believe it is billed in arrears meaning the tax is billed after you have had the use of the car. Good luck getting that back.
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      07-11-2012, 08:43 PM   #10
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I was referring to sales tax which I paid up front on the depreciated portion of car. Since I only had it 1 out of 3 years I was thinking logically the 2 years could be reclaimed. Just didn't know how. I'm not an expert on taxes but I'm pretty sure I'm not getting it back. Was just wondering if someone else had experience with this.
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      07-11-2012, 09:36 PM   #11
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Ok so I just learned something. It looks like the law in NJ was changed in 2005 which makes the lessor and not the leasing company responsible for the tax. In most states the leasing company is responsible for paying the tax then passes it on to the lessor as a portion on the monthly payment. Now in NJ the lessor is directly responsible. That is why you had to pay up front. I do not have experience with this issue but I don't see how you can recover the tax. Is there any way to pass those amounts on to the party assuming the lease?
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      07-11-2012, 09:38 PM   #12
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I wouldn't think so. every state is different
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      07-12-2012, 10:12 AM   #13
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I could only pass it on but it would be challenging to negotiate that bc the assumer of the lease would still have to pay his own tax. Double taxation!
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      07-12-2012, 10:41 AM   #14
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Quote:
Originally Posted by Lunker View Post
I could only pass it on but it would be challenging to negotiate that bc the assumer of the lease would still have to pay his own tax. Double taxation!
Bummer. It's not double taxation because the original lease and lease assumption are two separate transactions, but I get what you mean. I don't see how you can recover the tax you have already paid unless you can negotiate something in the assumption transaction, which does not appear likely based on what you are saying. Good luck with it.
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      07-12-2012, 11:08 AM   #15
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Thanks for feedback, like they say only things that are certain in life are death and taxes.
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      07-12-2012, 12:58 PM   #16
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Quote:
Originally Posted by Lunker
Thanks for feedback, like they say only things that are certain in life are death and taxes.
Lol. You live and learn! I was doing some research and found out that Maryland charges tax up front on the total sale price of the car even on a lease. That's ridiculous.
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      07-12-2012, 08:13 PM   #17
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my situation is different than yours, but hopefully it will be helpful.

i had an A4 leased in NJ, paid the ridiculous upfront tax on the lease and then moved out of state 1/2 way through the lease. i was able to get a pro-rated refund of my prepaid sales tax (~1,300) from the NJ tax department in trenton. it was a PIA requiring several calls and document submissions, and it took about 4 months.

take a look at the faqs: http://www.state.nj.us/treasury/taxa...reamfaqs.shtml

just start calling. it doesn't hurt to try.

good luck
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      07-12-2012, 08:39 PM   #18
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Quote:
Originally Posted by lhsa View Post
my situation is different than yours, but hopefully it will be helpful.

i had an A4 leased in NJ, paid the ridiculous upfront tax on the lease and then moved out of state 1/2 way through the lease. i was able to get a pro-rated refund of my prepaid sales tax (~1,300) from the NJ tax department in trenton. it was a PIA requiring several calls and document submissions, and it took about 4 months.

take a look at the faqs: http://www.state.nj.us/treasury/taxa...reamfaqs.shtml

just start calling. it doesn't hurt to try.

good luck
Great thanks for the info, I read through the examples and my head is spinning. I'm going to give them a call.
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      07-12-2012, 10:56 PM   #19
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Interesting. OP, maybe if you can show the state that the car got registered in a different state they can prorate a refund for you too. I don't see why this would be any different. Have the new leaser fax you a copy of his registration.
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      07-13-2012, 09:49 AM   #20
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Quote:
Originally Posted by amirz1000 View Post
Interesting. OP, maybe if you can show the state that the car got registered in a different state they can prorate a refund for you too. I don't see why this would be any different. Have the new leaser fax you a copy of his registration.

Yes thanks for the advice on this, that's a good way of looking at it.
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      04-15-2013, 01:14 PM   #21
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Tax was reclaimed

Just wanted to update from an old thread. I was able to reclaim the upfront taxes I paid on my car after I transferred out of the lease 1.5years in. Thanks to the advice of our members NJ gave me back apprx 1,200 for the 1.5 years of the lease I didn't have the car.
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      04-16-2013, 12:06 PM   #22
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Quote:
Originally Posted by Lunker View Post
Just wanted to update from an old thread. I was able to reclaim the upfront taxes I paid on my car after I transferred out of the lease 1.5years in. Thanks to the advice of our members NJ gave me back apprx 1,200 for the 1.5 years of the lease I didn't have the car.
makes sense. So what you have to do now, is to withdraw all $1200 in $1s and make a rain.
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