California Nissan dealer forcing to pay sales tax to them for lease buyout

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

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.

Buy the car from Nissan aka NMAC directly.

1 Like

Unfortunately, thats not possible. NMAC Customer Rep told me that they only allow ‘dealer assisted’ buyout and only to lessee now and no third party buyout so I need to go through the dealer to buy it and only I can buy it.

What options are you given on the Nissan financial web portal?

Literally just dealer assisted :frowning:

That’s annoying. For a while, people we’re getting a couple other options beyond what nmac was saying on the phone.

I wonder,

If this is Nissan Selling to the Dealer who sells to you and the 10 day rule is now invalid as it was only good for Lessor to Lessee, not Lessor to Dealer to Guy who was the Lessee

The agent doesn’t even know or care about 10 day rule just keep repeating it is illegal to sell without collecting tax…

You are missing the point.

Normal lease buyout is
Bank → Lessee (You). They expect you to go to the DMV and register it.

What I am suspecting Nissan is Doing is:

Bank → Dealer (Like they were buying the car direct ) - No Tax
Dealer → You (as if you were buying a used car) Tax.
The big difference here is it is not a Lessor to Lessee, it’s a Dealer selling you a used car.

No dealer in CA would sell you a ‘used’ car without collecting tax, or they might lose their license.
And since it is a ‘used’ car purchase, even if you resell it, no refund of tax.

That’s what I am suspecting is happening.

1 Like

Dealers don’t know anything about sales tax other than “We are obligated to collect it”.

You’ll have to escalate at NMAC for a direct buyout or call Consumer Affairs in your state.

Making you jump through hoops is another form of not honoring contracts.


Well Done Clapping GIF by MOODMAN

Hmm it might be. I wonder if there is someway for me to find that out.
From the lease documents

From my lease contract it seems like the dealership itself is lessor or all contracts list the lessor in this way?

Unfortunately that is going to be hard as NMAC is closed on weekend and my appointment is this weekend. If I don’t make it then due to all lease buyout my next appointment will not be in 2-3 weeks.

Appointment for what?

To do lease buyout.

ooo, that might work.
Though usually the bank is the Lessor, not a man in the middle dealer.

I smell class action? haha

What do you mean? What might work?

Can you look back at this answer and see if you think it answered the question?

There’s 0 discussion on LH about “appointments” to do lease buyouts, so don’t assume anyone will understand what you mean by “appointment to do a lease buyout.”

Who, what, where, why?

Ah sorry, the dealer made it sound like it is the typical thing.
I got the appointment after waiting two weeks and they keep saying if I don’t make this one the next one will be one month out as they are too busy with lease buyouts.

What might work?
A big fight to get your sales tax back.

Versus my thoughts of ‘oh man you are SOL if they did it that way’