Lease Calculator and Tax for Weirdo States like SC

sc

#1

Hi all, I love the site and it’s been immensely helpful (working on my own lease right now). The calculator is great, I was able to plug in almost all my numbers from the F&I sheet the dealer gave me to see it all clearly. The only thing is tax, specifically for the backwater jerkburg that I live in (South Carolina). In SC, technically we don’t even “tax” new car sales anymore. Rather, now we pay an “Infrastructure Maintenance Fee (IMF)”, because renaming taxes as “not taxes” is a thing now.

In any event, while the tax on new car sales used to be 5% capped at $300. It’s now 5% capped at $500. The fee is paid upfront and it appears to be levied on the total lease payment. Found this in a state document to support this: The infrastructure maintenance fee is remitted to SCDMV and is imposed at a rate of 5% of the gross proceeds of the sale, not to exceed $500, for a sale by a licensed SCDMV dealer or 5% of the vehicle’s fair market value, not to exceed $500, for a sale by a person who is not an SCDMV licensed dealer.

In practice, one can make the calculator show the proper tax in SC, but it requires outside math (egad). The “Tax is levied upfront on the total lease payment (e.g. NY, NJ, MN)” box works best, but it doesn’t offer the ability to cap it at a set amount. So, if you enter 5%, but the total lease cost is more than $10k, it’ll incorrectly show over $500 due.

My suggestion: Add a fourth radio button: “Tax is levied upfront on the total lease payment and is capped (e.g. SC)”. Next to/below this option (or appearing only IF you click this option), a box labeled “Sales Tax Cap” allows entry of the maximum tax amount (in SC, we would enter $500 here). Then, simply logic on the backend does an IF:THEN, i.e. IF X% of total lease cost > $Y sales tax cap THEN $Z total tax = $Y.

Don’t know if any other states are like this, but we are and we revel in our otherness!


#2

Isn’t SC the “palmetto” (roach) state? :grin:


#3

Indeed. We stop roaches at the bridge or redirect them to Savannah. Thems palmetto bugs.


#4

I think sales tax is levied on the sell price in SC. Your calculator concern is the reason why I’m not a big fan of on-line lease calculators as they’re limited in many ways. I prefer creating an Excel program to handle all the calculations. In your case, all you would need is a conditional statement… e.g., if (tax > 500, 500, Sell price x tax rate). If tax is, indeed, levied on sell price, then the tax will likely always be 500 .Then, of course, there are taxes on taxable fees.


#5

“is imposed at a rate of 5% of the gross proceeds of the sale” is a bit ambiguous to me - IANAL, but I could logically see it either way. But, you may be right. The DMV site is less vague: The amount of IMF you owe is based on the sale price of the item you buy. You will owe 5% of the purchase price, but it will be no more than $500. If you purchase an item that is $9,999 or less, your IMF will be 5% of the sale price. If it is $10,000 or more, you will owe $500.

If that is the case, you’re right, essentially all new retail vehicle sales would be >$10k and thus would be taxed at a flat $500. The only thing that leads me to question this is the F&I worksheet I snapped on my (bad) initial lease offer. The vehicle is undoubtedly “selling” for more than $10k, but somehow the tax assessment on the sheet worked out to $471.51. So, I figured it was based on total cost of lease, and the dealership was doing some fancy pre-tax/post-tax BS behind the scenes to show the total cost of the lease as less than $10k. Obviously the total cost of that lease SHOULD be >$10k (incidentally, you’ll note the total cost of lease is not a field on that workbook), so the tax SHOULD be $500 on that deal, no matter which way it’s calculated. But, since it came back slightly less than $500, the only way I can see them figuring that amount is backstage wizardry and tax on total lease cost.


#6

Didn’t look at the worksheet in detail. I will analyze it and get back to you a little later on.


#7

In the meantime, add $500 to another field such as Reg/DMV/Govt fees


#8

Okay, something is missing. The worksheet shows tax = 471.51. If the tax rate is 5% and if the sum of the base payments is taxed as in Ohio, NJ, etc., your base payment would have to be 261.95 which is impossible given the data in the worksheet. To wit…
261.95 x 5.00% x 36 = 471.51. This is the only tax amount I see in the worksheet. Are you getting a tax credit? If the sell price was taxed, I would expect to see 500 according to the information you’ve provided.
The 40 license fee 40 is not capped. How is that being paid? Therefore, it should be paid upfront but, it’s no where to be found. The only fees you’re paying upfront are…
1st payment = 387.76
Cap reduction = 569.75
upfront charges = 28.49 (what is this?)
DAS = 986.00
I would not put any money down (i.e., the 569.75 cap reduction) Your interest rate is about 1.73% which is cheap… use the money for other more productive purposes.
Get rid of the bs 700 esc premium. Get an explanation of the dealer closing charge of 524.73… looks like more bs. Incidentally, the base payment is wrong. The base payment is used only for purposes of computing tax. The 387.76 is your monthly lease payment. I didn’t compute the base payment but will do so if you like. I’m certain it’s far more than 261.95. You need to determine how the dealer arrived at the 471.51 tax.


#9

Thanks man, I appreciate it. I should have noted (I replied in the other thread, the one with the terms you’re referencing) that they walked me this morning. I took these terms, told them to nix the $700 service contract and the $524.73 “DLR CLOS CHG”, that I’d pay in advance first month, tax, doc, and title/reg. Sales manager called me back to tell me “All of our leases come with ESC Premium, the car would actually be more expensive without it!”, offered me $300 off for a monthly of $373-ish, and walked me when I didn’t agree. We were about $900 apart, all told.


#10

What’s killing you is the two bs fees and a residual that sucks. But, it is a 2018. The way I see it, you and the dealer are 2,600 apart. I would be willing to pay 300 per month with only the first payment due upfront.


#11

Yeah, I found three more identical 2018s within a couple hours drive, sent them the F&I and basically said “match this minus the BS fees and you’ve sold a car”. Speaking to the tax issue we discussed earlier, yeah I don’t get it either. I was NOT getting a tax break. So by all reasonable measurements, the SC tax should have been $500. But, it wasn’t, which is why I thought maybe SC WAS “tax on price of lease” and the dealer had some tricky backend dealings to show the total lease cost as under $10k on paper.


#12

Nope. No tricky back-end dealings.Leases are subject to audit by the State’s Department of Revenue. Also, there is no way that any fund provider would fund the lease if that were the case. Surely the dealer can explain this taxing situation.


#13

Probably, but they walked me, so screw them lol :slight_smile:


#14

I hear ya!


#15

I was able to close a deal last night - I updated it in the other thread I linked to. Went back to the original dealer because I got a better offer, asked them to match and they did. HOWEVER - I only paid $426.45 in tax! I asked the F&I guy why it wasn’t a straight $500, and even he couldn’t explain it - basically, “we put it all in the computer and whatever it spits out is what it is.” It’s that same amount on my Honda Financial lease agreement, meaning the dealer is quite certain it’s correct. But, the total lease cost is $13,588, and the sale price of the car is $28,195. Hilariously, on the OTHER offer sheet I got from the competing dealer, they listed the tax as $500 even. ¯_(ツ)_/¯

So, I guess the best suggestion would to add a radio button labelled “I live in SC”, which links to this image:

image


#16

Yeah, dealers generally don’t know how leases and taxes are calculated which I find to be pathetic. Even though you signed the contract, don’t be surprised if Honda rejects. I’m sure the dealer has yet to send all the documents to HFC. If so, just sign the amended agreement and pay the additional 73.55.
Enjoy your new ride.
Mod Edited…Remove Political reference


#17

Pic has nothing to do with any NY abortion laws. It’s a movie reference.

Again, not everyone or everything is political, nor needs to be turned into political. Had it been, it would have been removed.

Reference removed from your post.


#18

@Equilibrium Thank you for letting us know about the new SC fee. I think the fee is best represented under the non-configurable Reg/DMV/Govt fees like @max_g has pointed out. While we try to make the calculator as convenient as possible, sometimes we have to forego state-specific features that would create more confusions and clutter for most users. We have changed the label for these government fees on our calculator so to encapsulate the fees you mentioned in your state.