Residual Tax Questions
10-25-2009, 11:50 AM
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Residual Tax Questions
I've asked around on the Internet and also searched using "Lease, Residual, Tax" (can you imagine how many hits Google returned 
) but this forum seems to have a lot of traffic.
Very simple question (I believe): if I buy my car at lease end then I know I'll be responsible for the Sales Tax on the residual (I'm in NYS, I paid tax up front but it should only have been on the difference between the cap cost and residual so I owe the balance). If I then turn around and sell the car to a private party I won't recover that tax (although the buyer will have to pay tax in HIS jurisdiction, what a racket), correct? But if I trade it in I DO get the tax credited (much as when I owned the vehicle)?
Is there a way around this (again, if I just want to purchase the car to resell, I might be able to make a bit)? My leasing company has a reputation for, shall we say, not being the friendliest so this would need to be something that didn't involve them.
Thanks in advance for any info.
) but this forum seems to have a lot of traffic.Very simple question (I believe): if I buy my car at lease end then I know I'll be responsible for the Sales Tax on the residual (I'm in NYS, I paid tax up front but it should only have been on the difference between the cap cost and residual so I owe the balance). If I then turn around and sell the car to a private party I won't recover that tax (although the buyer will have to pay tax in HIS jurisdiction, what a racket), correct? But if I trade it in I DO get the tax credited (much as when I owned the vehicle)?
Is there a way around this (again, if I just want to purchase the car to resell, I might be able to make a bit)? My leasing company has a reputation for, shall we say, not being the friendliest so this would need to be something that didn't involve them.
Thanks in advance for any info.
11-11-2009, 04:32 PM
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I've asked around on the Internet and also searched using "Lease, Residual, Tax" (can you imagine how many hits Google returned ) but this forum seems to have a lot of traffic.
Very simple question (I believe): if I buy my car at lease end then I know I'll be responsible for the Sales Tax on the residual (I'm in NYS, I paid tax up front but it should only have been on the difference between the cap cost and residual so I owe the balance). If I then turn around and sell the car to a private party I won't recover that tax (although the buyer will have to pay tax in HIS jurisdiction, what a racket), correct? But if I trade it in I DO get the tax credited (much as when I owned the vehicle)?
Is there a way around this (again, if I just want to purchase the car to resell, I might be able to make a bit)? My leasing company has a reputation for, shall we say, not being the friendliest so this would need to be something that didn't involve them.
Thanks in advance for any info.
) but this forum seems to have a lot of traffic.Very simple question (I believe): if I buy my car at lease end then I know I'll be responsible for the Sales Tax on the residual (I'm in NYS, I paid tax up front but it should only have been on the difference between the cap cost and residual so I owe the balance). If I then turn around and sell the car to a private party I won't recover that tax (although the buyer will have to pay tax in HIS jurisdiction, what a racket), correct? But if I trade it in I DO get the tax credited (much as when I owned the vehicle)?
Is there a way around this (again, if I just want to purchase the car to resell, I might be able to make a bit)? My leasing company has a reputation for, shall we say, not being the friendliest so this would need to be something that didn't involve them.
Thanks in advance for any info.
11-14-2009, 03:51 PM
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Not sure about NYS but here in Cali you do not get the tax refunded if you paid it on a residual buyout and then trade in the car. The dealer that takes in the trade doesnt pay the state tax either since they have a dealer/resale license. They just collect tax on the car when they resell it to a new customer and pay the Department of Motor Vehicles later(quarterly).
I'm going to try and get my dealer to see if US Bank will sell the car directly to him and, if so, what I can get out of it (or at least if I can avoid a loss). I've heard say that sometimes the dealer can get a lower buyout than the lessor (or is it lessee; i.e. ME?), but since US Bank is involved I'm not getting my hopes up.
Thanks for the post.
12-07-2009, 03:30 PM
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I've asked around on the Internet and also searched using "Lease, Residual, Tax" (can you imagine how many hits Google returned ) but this forum seems to have a lot of traffic.
Very simple question (I believe): if I buy my car at lease end then I know I'll be responsible for the Sales Tax on the residual (I'm in NYS, I paid tax up front but it should only have been on the difference between the cap cost and residual so I owe the balance). If I then turn around and sell the car to a private party I won't recover that tax (although the buyer will have to pay tax in HIS jurisdiction, what a racket), correct? But if I trade it in I DO get the tax credited (much as when I owned the vehicle)?
Is there a way around this (again, if I just want to purchase the car to resell, I might be able to make a bit)? My leasing company has a reputation for, shall we say, not being the friendliest so this would need to be something that didn't involve them.
Thanks in advance for any info.
) but this forum seems to have a lot of traffic.Very simple question (I believe): if I buy my car at lease end then I know I'll be responsible for the Sales Tax on the residual (I'm in NYS, I paid tax up front but it should only have been on the difference between the cap cost and residual so I owe the balance). If I then turn around and sell the car to a private party I won't recover that tax (although the buyer will have to pay tax in HIS jurisdiction, what a racket), correct? But if I trade it in I DO get the tax credited (much as when I owned the vehicle)?
Is there a way around this (again, if I just want to purchase the car to resell, I might be able to make a bit)? My leasing company has a reputation for, shall we say, not being the friendliest so this would need to be something that didn't involve them.
Thanks in advance for any info.
12-07-2009, 03:32 PM
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Wow, good to know.
That's what I love about American ingenuity: if there's a need, someone will come along and provide the service.
Thanks for the post.
That's what I love about American ingenuity: if there's a need, someone will come along and provide the service.
Thanks for the post.
