So I was lucky enough to lease an $90k car in Virginia before moving to California. Now BMWFS is charging me Cali taxes on top of the ~$5k in taxes I already “paid” to Virginia (which is rolled into my monthly).
Of course VA and CA do not have a reciprocity agreement. Anything I can do about this? I just emailed the tax assessor for property taxes in VA about that issue too and mentioned this.
EDIT: (I will edit this as things progress in the hopes it helps someone in the future) - to get your property tax refunded you email CAPP with a copy of your out of state registration. My property tax has now been negated in Virginia, and I am emailing BMWFS (with this confirmation forwarded).
Virginia charges sales tax at inception and PPT. As you mentioned you can check with whomever asses your PPT (city, county) about a prorated refund or voiding the impending prorated payment.
California taxes the lease payment. No getting out of it, no matter what tax you paid elsewhere.
Even the start or end didn’t make any sense. There’s nothing illegal about a state charging sales tax based on its own laws. There’s no federal law against this. Only internet warriors think they can take this all the way to the SCOTUS.
To the OP, make sure you’ve stopped the clock on property tax based on the date you moved out of VA. As for sales tax that you paid or capped upfront, there’s nothing you can do AFAIK. Just chalk that up to the cost of moving.
California charges a use tax on the leased portion of an automobile. So unfortunately each lease payment made while the car is registered in California is subject to the tax.
Virginia charges a sales tax on the full value of the leased vehicle at inception. So yeah, you’re looking at double taxation due to each state’s interpretation.
But, California allows a person who has paid sales tax in another state to deduct that sales tax from the use tax. I think, to avoid the double tax, you would buy out the lease so you own (or are financing) the car in MD before transferring to CA. Assuming MD doesn’t charge another sales tax when you buy out the lease, then you can bring the car to CA and deduct that sales tax paid at lease inception from the use tax you owe CA.
If you owe use tax, it will be based upon the purchase price of the car, minus whatever sales tax you paid to another state . You can pay the tax to the DMV when you register the car in California.
OP mentions it was a $90k car. Depending on what it is, they may view the additional lease tax as a small price to pay to avoid holding the bag on its depreciation.
You were supposed to notify the county tax dept as soon as you moved the car out of VA. Then they bill prorated prorated PPT. Also, it depends how your leasing bank handles PPT. Some bill you directly after receiving the county bill. In this case, good luck with getting the refund. You may still get it, but the bank and county will point fingers at each other.
California has a ~9% use tax … so unless he leased a massively underwater $90k BEV, I would imagine trying to reduce this use tax somehow would be worth it.
I feel like the only lesson we can learn from all this is that leasing a vehicle in VA sucks.
