Lease Rental Tax in PA?

Ask the Hackrs
1

I am ready to strike a deal with a dealer in PA but before I do, they are saying I have to pay a PA lease rental tax along with MA sales tax. Doesn’t matter if I am registering the car in MA, I still have to pay 3% of this PA tax… Is this true? It is kind of confusing. I did check PA laws and they do have sales tax + rental tax but don’t know if it matters if the car is out of state or not.

2

Never heard of this. I’ve dealt with out of state people many times. Pa pays 6% plus 3%. That has nothing to do with your state…

3

PA charges a lease tax of 3% on top of the state sales tax of 6% on all leases. (Allegheny county in Pittsburgh is 7% + 3, and Philly is 8% + 3). There’s no 4% “PA rental tax” involved.

4

So if I am registering the car in MA, I shouldn’t be paying the 3% rental tax, correct?

5

Correct. You pay tax in the state it is registered in. You aren’t registering it in Pennsylvania

3 Likes
6

It may be helpful to find a dealer who deals with out of state leases, otherwise you will be on the learning curve journey with them.

7

Yes agreed but I’m okay with the price. I’m going to call PA treasury to confirm

8

Spoke to the sales tax revenue department of PA and they said the 3% is valid regardless if you live in PA or not. They said you can appeal it once it is registered in MA to receive a refund. It is MA sales tax + PA’s rental tax of 3%, which adds $6 a month or so. I think I can live with it and just appeal it once I hav the car physically in my hands.

Should I go about this?

9

That’ll kill a lot of folks in NJ/DE/MD from shopping PA dealers. Good to know. Thx.

10

So it’s 3% and not 4%…that makes more sense.

11

Yes flat 3% across the state

12

Something must have changed in the last 6 months. I live in NC and leased a QX60 from a PA dealer in May 2018. It took some work to convince them about the tax rate for NC, I ended up having to send in previous lease paperwork to convince them of the 3% tax rate. But there was no mention of an extra PA specific tax.

13

Maybe the state realized they can make more money this way haha.

14

Ive done several out of state deals just this month. There was no 3% add on…either it doesn’t exist or my dealer is in for a suprise at some point

15

Wonder if there’s a reciprocity agreement in place for NC and not MA?