I leased a 2020 Nissan Leaf for 2 years 24k miles. Due to WFH it just has 3.9k miles on it and is due in Feb end for return.
I checked CarMax, Carvana, Vroom etc price for it and it seems like I can sell it at higher price than my buyout to recoup some of the money I lost in leasing it and not being able to use it.
Following some of the threads here my plan
- Buy the car from Nissan dealership
- Register the title in my name (paying sales tax to DMV)
- Immediately sell the car to third party company within 10 days to avail CA Sales And Use Tax Law CHAPTER 3.5. VEHICLES, VESSELS, AND AIRCRAFT * Section 6277
- Get refund from CA DMV.
Now the issue is that the dealership from which I am buying the car is saying that I must pay the sales tax to them directly and they can’t do the buyout if I don’t pay taxes to them as it is “illegal”.
I found that CDTFA specifically clarifies the sales tax law when car is being brought by leassee:
Under “Specific types of sales”
Please note: Licensed Lessor-Retailers
If you sell and lease vehicles and are licensed by the DMV as a lessor-retailer, the following special rules apply to the
retail sale of a leased vehicle:
• If you sell the vehicle to the lessee, you are not required to file a report of sale with the DMV. You are also
not liable for sales tax on the transaction; however, the lessee will be required to pay use tax when he or she
registers the vehicle. (If you do file a report of sale when selling to the lessee, even though you are not required
to do so, you will owe sales tax on the sale.)
• If you make a retail sale of a leased vehicle to someone other than the lessee, you are required to file a report of
sale and to report and pay sales tax.
The only way for this not being applicable to the dealership will be if they are not “Licensed Lessor-Retailers” which I am not sure of or even know what it means. But they have not mentioned that to be the case so far. Later on, it also talks about the 10-day rule of resale.
I am going back and forth with the agent at the dealership about this but they are pretty ignorant of the rule and are set on collection sales tax.
Does anyone have any experience in dealing with this in NorCal? I don’t want to switch dealership for the buyout because this is the dealership from which I got the car and the agent is kinda known so they are not charging me with made up dealership costs (like “pre sale inspection” charge of $750+) which most dealership is doing these days to make money of buyout.