Sold by a vehicle’s lessor to its lessee upon the expiration of the term of the vehicle’s lease, if the lessee is a natural person and this natural person has paid the tax levied pursuant to this chapter with respect to the vehicle when he leased it from the lessor, and if the lessee presents an original copy of the lease upon request of the Department of Motor Vehicles or other evidence that the sales tax has been paid to the Commonwealth by the lessee purchasing the vehicle;
This I am not finding. The last part about the title being in a named individual is some interpretation of the rest of exemptions and interpretation from elsewhere. I am not finding anything that the transaction has to be at the originating dealership (not that it isn’t elsewhere, it’s not in exemptions).
I miss a lot about living in Virginia, definitely not this. Not one bit.
Aside, this part is bothersome, but we’ll save for another time.
DEFINITIONS Leased Motor Vehicle – Any vehicle designed for transportation of passengers or property, used for such by a lessee (individual paying to use the vehicle) who under agreement with the lessor (owns the vehicle) pays the lessor a fee for the use of the vehicle for a period of 12 months or longer, with NO transfer of ownership.
It also mentions
Authority: Code of Virginia §§ 46.2-619, 46.2-623, 58.1-2401
Which still doesn’t require the transaction at the originating dealer.
My apologies for the confusion. I cited the regulation but the interpretation (or how VA DMV would apply the rule/exemption) is taken from the DMV website. (See Virginia Department of Motor Vehicles
Now I’m really curious as to why the DMV is involved in this at all? You go there to register your car and show them the lease agreement with the sales tax paid.
The vehicle must be acquired at lease end directly through the lessee, or the dealer who originally leased
the vehicle to the lessee. Purchases of leased vehicles through a different dealer disqualify the lessee from
receiving the SUT exemption.
The law grants the tax exemption if a vehicle is “Sold by a vehicle’s lessor to its lessee upon the expiration of the term of the vehicle’s lease, if the lessee is a natural person and this natural person has paid the tax levied pursuant to this chapter with respect to the vehicle when he leased it from the lessor, and if the lessee presents an original copy of the lease upon request of the Department of Motor Vehicles or other evidence that the sales tax has been paid to the Commonwealth by the lessee purchasing the vehicle” 58.1-2403(25).
Based on previously working as an admin lawyer my suspicion is that the DMV has some power to promulgate regulations that expand and clarify the actual Virginia Code. Agencies have to make complex statutes understandable for public consumption. That’s normal. However, in this case the DMV regulations appear to go far beyond just explaining the law but rather make substantive changes inconsistent with the will of the legislature and that are against the public interest. My guess would be that if anyone decided to challenge this in court the DMV would probably not bother to even try to justify this regulation. But doing so is an expensive and time consuming endeavor. Easier to just go to the original dealer.
I am wayyyyy fishing without a license here, but that was also my take. Of course they interpret the laws and make them as understandable as possble by dmv customers, but this seems like a stretch.
I bought out my leased Volvo in VA last month using a third party credit union and didn’t have to pay any additional taxes. All I had to do is show the DMV I originally paid the full VA sales tax in my lease agreement. I never once talked to the original dealer I leased the car from, just Volvo Financial.
Why would VA state law have anything to do with your lease buyout if you’re in a different state? I leased mine from a MD dealer.
This is exactly what we are talking about here. Why would the DMV have this language at all and why would dealers tell this to their customers? If you read the discussion, this requirement is not in VA state law, but DMV has it in its requirements for some reason.
For the DMV, I’m going to go with the old saying " Never ascribe to malice that which is adequately explained by incompetence.". Who knows why that’s on the website but with data points that they don’t enforce the rule it’s probably just some incompetent staffer. Of course, for dealerships malice is more likely although incompetence is still definitely in the cars, especially based on the bad DMV website.
It’s not the MVDB, that concerns car dealerships not the DMV. In my younger childless days this would be the type of BS I might spend a few hours fighting. Gonna be much harder to summon the energy and time now to fight through the levels of bureaucracy to get this changed.
We don’t need to go through dealers at all to buy out leases, just as @unprocessed did. But some banks force you to go through their dealer. And then that non-original dealer will charge you sales tax while doing your registration, because that’s what DMV requires. I thought Volvo also requires buyouts through a dealer.
Just went through this process with Audi. Bought my lease out through Audi Financial (the Lessor). Audi sends you the title, but you have to re-title the car if you want to sell it. When you submit the paperwork to the DMV for the title, you also need to file out an additional form that exempts you from paying sales tax. You need to supply your lease agreement to show that the tax was paid. Only paid the $17 to retitle, and got my clean title to sell the car.
Toyota FS insists on going through a dealer. I’d be happy if she could do the whole thing via mail. VW Finance sent us all the paperwork and no dealer was needed when we bought out the lease on our New Beetle, IDK if Toyota FS does this in all states or just for VA or a limited number of states.
Why not just make a lump sum payment to TFS in the amount of the residual value plus your remaining payments. They will post it and then the vehicle will be paid off (they will owe you some rent charge/interest/money factor) back.
