Help! NY taxes on lease

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Hi! I’m in NYC
I get affiliate pricing on Jeep.

The MSRP is 39k (but with my discount I will only pay $350/mo before tax) & the residual is 50%

Do I pay taxes on the $19.5k (residual value) or only on the $350 /mo discounted price?

Thank you!!

You pay taxes on the portion of the car you use. So, if you have a residual of 50% you pay tax on the other 50% that you’re using during the lease. Your tax rate multiplied by $19,500.

Ny taxes you say??? Someone shine the @ap919 symbol in the air. Like Batman she shall appear :woman_superhero:

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Uhh, that is 100% incorrect.

NY charges tax on the monthly payment, due upfront.

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You are looking at it the wrong way I think
In Cali you pay taxes on the monthly AND cap reduction.
So you are looking at the wrong side of the equation.

Jon-I think we’re looking at the same thing 2 different ways. The the monthly payment and down payment is a derivative of the residual and money factor. So by saying that we pay on the monthly payment…we’re paying on the used portion of the car because the sum of them is-the used portion of the car. Selling price less residual. By paying upfront, one would avoid paying tax on the finance charge, no?

Obviously the monthly will depend on the depreciation, but your statement is still wrong. You still need to factor in the rent and fees.

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Not 100% accurate , as you can choose to roll the tax payments into the monthly payment . (Please correct me if I’m wrong )

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Pretty self evident if you use the calculator to check your deal, which everyone should be doing

Rolling the taxes into the monthly doesn’t mean that they weren’t due and paid upfront to the state.

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Aha. Good point. Learn something every day :slight_smile: so if you transfer a lease within New York there’s no issue with sales tax as it was already paid upfront regardless if you actually paid it at lease signing or rolled it into the monthly payment ?

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Slightly inaccurate. Taxes are paid on the depreciation, interest, most rebates, and a few other things. There’s also a crazy formula I’ve posted several times that must be used for when the tax is capped.

Nope, sorry. Please search for my posts where I posted the full publication and formula. You still need to pay tax on the rent charges, as you do in most states, save for places like Texas, Maryland, and VA.

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You would be taxed on the remaining payments.

Okay . So I’m my case where I paid taxes and fees at signing the person taking over my lease would have to pay taxes on the monthly lease payment as well ?

Your taxes have already been paid, if you rolled it into the monthly then the finance company paid them on your behalf. Any transfer of the lease will incur taxes on the remaining payments.

No matter what, the person assuming the lease will pay taxes. It’s a new registration. This isn’t unique to NY (despite what people say or kvetch about; many states do this in general). How it is taxed depends on how much of the lease is left. I believe it’s a defined line between more than 12 months and less than 12 months, if I remember correctly.

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I am looking a lease transfer with BMW from NJ into NY. 9 months remaining. BMW says they will bill me for the taxes on the 9 months remaining. To be expected. However, when I went to NY DMV website to register it, it asked if NY State sales tax was included in the lease payment? If No, it then asked “Are there 12 or more monthly payments remaining.” I click No and it says please fill out Claim for Sales and Use Tax Exemption (DTF-803). So I guess I will be billed by BMW and then get reimbursed when I go to register it with the NY DMV? The actual form has an exemption for “Leased or rented vehicle” but doesn’t provide 12-month limit. There are no other insructions for this form.

Hi- Thank you for all the helpful tax info on here.
I was wondering if building all NY sales tax and fee’s into the monthly payment will trigger a worse money factor? Or in general can I expect to get the same MF I’m getting/seeing on Edmunds even if I ask the dealer to roll all taxes and fees into the payment so DAS is just 1st month + DMV? Or does it vary by brand?
Thanks in advance

It’ll be added to your cap cost.

Yes unless the dealer marks up the MF for profit.