I recently put my car up for lease transfer and I have someone who is interested, I am an NJ resident and the car is registered in NJ. The interested person is in Pennsylvania. I pay 365 per month in NJ for my Jeep Wrangler, we would like to know what monthly payment can the new person expect in Pennsylvania.
I paid no MSD and no Down payment when I purchased the lease and I had my taxes rolled over in my monthly payment. The lease is through US Bank.
Would the bank take out the tax component from the monthly and apply the PA taxes after the lease assumption?
Would the bank apply the PA taxes on the existing monthly payment of 365 per month ?
I tried calling the customer service says that its upto the lease assumption department to confirm nobody seems to know the answer. Dealership didn’t have an answer either.
Well I haven’t paid taxes in advance they are part of my monthly. I read somewhere that NJ is one of the state that let’s go of taxes for outgoing (out of state) transfer lease.
It depends on pa tax code, we did a lease transfer in January 2017 from nj to delaware, the payment went from $670 in jersey to $685 in delaware because of usage tax.
The individual assuming your lease will pay your taxes as well as whatever Delaware imposes; even if ti was within the same state, at least as far as NY is concerned, if you rolled your taxes into the monthly then the new lessor will pay both the original tax and then an additional tax based on the new transaction.
Imagine instead of a lease it was two purchases. You buy the car, pay the tax (or roll it into your monthly payments) and then sell it. You get no refund of your tax and the new purchaser once again pays tax on the value of the vehicle.
Similarly, if you had paid the tax upfront no refund is forthcoming to you and the new owner will pay the tax on the full value of the vehicle.
I’m not familiar with NJ tax law in particular but In some cases you don’t pay taxes in both states. One person on LH did a lease assumption from CA to NY. In CA tax is assessed on the monthly payment. In NY it’s done upfront I believe on the total outstanding payments as a lump sum (don’t quote me on how exactly they calculate but it was a lump sum payment). So when it was transferred the leasing company charged him no longer the CA tax on the monthly, they just charged him the monthly payment without any tax and then he received a Lump sum tax bill in the mail a few weeks later from the state of NY. As for NJ, I can’t tell you how or if partial tax would be refunded in the case of a lease transfer because it’s basically the reverse scenario of what I described above, but I just wanted to showcase that taxes can change and be adapted, just not sure what NJ does in particular.
