Lease Buyout - avoid the double tax?

Todds911 · February 9, 2021, 1:09pm

My buddy is leasing a Range Rover Sport 2018 The lease buyout is $51k. Bank is US Bank.

The lease buyout is $51k for him, but is higher for a dealership and even more for third parties. Seems US Bank has different buyout prices based on who is buying the car.

Is there any way to get the lease buyout of $51k (the lessee’s buyout), without having double tax (my friend buying and paying tax and then me buying from him and buying tax)? State is PA.

US Bank collects the price and tax from Lessee. Title goes in his name. He can’t really “sell to me” for less than FMW, as DMV looks up FMV when titling the vehicle for tax purposes.

I don’t see a way around the double tax (him paying, then me paying) but thought I’d ask.

Also, my friend is not an auto broker and is not in the car business. And he leased the car in his name as an individual.

thanks

mllcb42 · February 9, 2021, 1:17pm

With the exception of being in a state that has a tax exemption period (California), you’re stuck paying the double tax here.

Todds911 · February 9, 2021, 1:28pm

Dang. Thank you

max_g · February 9, 2021, 1:29pm

Consider it the state helping you dodge a bullet.

Phantomcypher · February 10, 2021, 8:49am

Yes, have him buy it out in the state of Arizona. Then have him sell it to you in Arizona. They have no sales tax between private sellers.

mllcb42 · February 10, 2021, 12:19pm

Ya, but the cost of them both moving to Arizona and setting up residency there first is way higher than the sales tax savings.

d_sharp2003 · February 10, 2021, 12:26pm

Details… in the top left corner is your monthly payment, that’s what’s important right?

Todds911 · February 10, 2021, 1:00pm

My wife wouldn’t mind a second home in AZ !

But it’s not a short flight from PA…

max_g · February 10, 2021, 1:10pm

And of course the thread has devolved into tax evasion suggestions

mllcb42 · February 10, 2021, 1:48pm

Just imagine how large of a house you could buy with the sales tax savings on this buyout… One, maybe even two, whole walls.

mp11477 · February 10, 2021, 2:41pm

Nope. A box of drywall screws, if on sale, after real estate tax. The tax man gets you at every nook and cranny

mllcb42 · February 10, 2021, 2:43pm

I didn’t say they were big walls or that there was anywhere to actually put them.

Actually, with the price of lumber today, you’re probably right.

mp11477 · February 10, 2021, 3:06pm

At least that expensive lumber won’t warp in that dry desert heat

system · April 11, 2021, 3:06pm

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