Assuming lease from out of state (NJ)


I live in NJ and I am thinking of assuming a BMW lease from a person located in CT. I have a question in regards to taxation. As I understand, NJ charges taxes upfront on leased vehicles. The prospective car has 20 months remaining on its lease. Will I be charged taxes on the amount of payments remaining (20) or will I be charged taxes on the initial price of the car - residual (36 payments)?

Thank you.

SB on total of remaining payments. Sad part is a portion of those remaining, may very well be CT sales tax. So taxes on taxes.

Thank you!

Btw initial value of the car - residual != 36 payments.

It would be that difference + money factor right?

Basically yes.

  • the rent/finance charges to be precise.

Try finding a takeover in nj unless u really want that particular bmw.

If u take over in nj, no tax

From where is information that NJ takes taxes upfront? I’ve taken over lease from NC, and BMW FS just adjusted monthly payment a bit to reflect tax difference.

NJ always tax upfront on leases.

Seems not the case for lease transfer

So BMWFS paid the tax upfront and rolled it into your monthly?

i would say highly unlikely, my guess is he’s going to get a big fat bill in the mail for the lump sum of taxes owed.

May be, but that was standard lease transfer process, so I doubt that exception was done for me, I think this just works this way. It is not mandatory to pay upfront in NJ, even for new lease taxes can be rolled into monthly payment

It it unlikely, as technically BMW FS is owner of vehicle, not me

They are rolled into the cost of the lease. They are still being paid upfront, either by you or the lease company. A lease transfer from another state probably doesn’t get taxed the same or picked up on.

If you own a car and move from another state then NJ doesn’t charge you tax on your purchase price they assume the tax was paid already.

I should have stated a new lease is always taxed upfront in NJ in my last comment.

Yes, it is. Go look up the statute and/or calculate a payment based on:

(A) Tax is based on the monthly
(B) Tax is paid upfront and rolled into the capitalized cost, thus paying interest

A and B are different (unless the MF is effectively zero)

I highly doubt it doesn’t get picked up. It’s been a while since I filled out the forms myself but tax always needs to be paid unless an exemption box can be checked. Moving to the state is an exemption but if you are already a resident you don’t get an exemption for a lease transfer.

I’m leasing 4th vehicle in NJ and never payed tax upfront, dealers just roll this in monthly payments. This is good, because if you let’s say transferred lease earlier, you don’t loose money on taxes payed upfront.

The dealer/captive pays the taxes on your behalf up front, and rolls the balance into the lease, subject to interest.

You did. You just didn’t realize it. You paid the tax upfront and then you paid interest on it every month.