I am working with a few dealers in Florida to lease a vehicle on a one-pay lease. I have a vehicle I would like to trade that is more valuable than the total value of the one-pay lease.
Something like this:
One pay lease amount: $30,000
Vehicle Trade Value: $50,000 (vehicle has no loan)
Am I correct in assuming that the trade should wipe out any sales tax liability on the one pay lease?
I have 2 different dealers telling me that trade in allowance does not offset sales taxes on a lease payment, and they are trying to collect sales tax on the full amount of the one-pay lease.
However, every bit of documentation I can find online says otherwise, including a “Technical Assistance Advisement” published by the state department of revenue. Link is here: https://floridarevenue.com/TaxLaw/Documents/09A-041.pdf
Both finance managers are acting like I am crazy for questioning them, but it really doesn’t seem right unless there is something I am missing. One even refused to look at the department of revenue document above and angrily told me “this is how we’ve always done it”
Has anyone else run into this? Thanks for any info you can share.
So technically, one of the title companies I have access to says:
Credit for Trade-in is only allowed if previous vehicle is titled in the name of the Lessee. Credit for Rebates are not allowed. Note: Trade-in credit is not granted toward vehicles that were previously leased and turned in at the end of the lease term. Additionally, contacting the Lessor to confirm this tax rate will ensure the funding of your lease contract.
But I have no idea how this is effectively applied in a state where the taxes are monthly on the payment, or if this only applies to upfront taxes?
Ok true, but that should have no impact on trade allowance credit applying to the sales tax on the lease if its allowed. Im just trying to reconcile the documentation from the state and what the dealer F&I guys are saying.
Make sure you’ve shopped your current vehicle around to a few places ( Carvana, Carmax, Driveway ) amongst others, so you have a baseline to compare. As we say on here many times the place that gives you the most for your trade is unlikely to be the place that also gives you the best deal on the new one.
Good advice, thank you and I agree with what you said.
However, my question has nothing to do with the deal at hand and I am very familiar with the negotiations process.
I am trying to ascertain why two dealers are attempting to charge a large sum of sales tax on a lease and not giving credit for the trade. I cannot reconcile these dealer practices with any other documentation.
I believe some states do not allow the tax credit if the new vehicle is not titled EXACTLY the same as the trade-in vehicle, which means you don’t get the credit if you trade in a financed or owned car on a leased car.
According to the Google AI ( I know, take it with grains of salt ) an owned vehicle being traded in cannot reduce the tax burden on a leased vehicle in FL. I know it says b/c it’s an ongoing payment however I think even if it is a one - pay they are going to view it as ongoing. Mostly b/c if the vehicle is totaled, you would get a pro-rated portion of what you paid back vs in a purchase scenario you would not. The last sentence is me speculating.
You could pay it then appeal it to the tax board and perhaps they would see it your way? Just an idea.
@mllcb42 is a FL resident and perhaps knows the answer?
