Maryland buyout tax

I know Maryland charge you tax on the sale price when you lease a car. Now half way into my lease term I want to buy the car out. Would I be charged sales tax again?? I would love to hear from someone who went through this before.

Surely you’re massively under water. You sure you want to pay much more than the car is worth?

Why buy it out early? Wait until the end, never know when you might encounter a snowy off ramp, let the bank take the risk. What happens if you get in an accident, then you have diminished value

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Not sure what you mean but the car is depreciating at market value. My question is about the sale tax specifically

I agree with you but I have to buy it out definitely before maturity date (for some personal/family reasons).

Wait til maturity or as late as possible.

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I will but the question is: will I be paying sale tax again on the buyout?

Most states you’ll pay tax on the residual, I’m not sure about Maryland, but if you owe them, you’ll be paying them regardless

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No.
You have already paid the tax. But the title is held in the lenders name.

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I found this using the Google Machine.

http://www.mva.maryland.gov/about-mva/info/27300/27300-30T.htm

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Thank you all. For some reason I was not able to find this link in my search. So no double sale tax on lease buyout in MD.

Hi HMB45,
Did you find out if you had to pay sales tax again while buying out your lease in MD?

We ended up not buying the car. But from the link above it seems that you don’t pay additional tax.

Thank you. Just thinking if it make sense to buy out my lease.

You actually do pay tax again, we found this out a few months ago when we were trying to buy out the lease. If you personally buy it out, you pay tax. If the dealer buys it out, you don’t. When you call the leasing company, there are multiple rates they’ll give you to buy it out: the rate for you personally buying it out with tax including and the dealer rate without tax included.

That’s very useful information. Thank you. I assume the tax is on the residual value, not the original price. correct?

It’s State specific. As Trism pointed out in maryland you do not as long as you are original lessee.

Correct. You also have to be mindful of who your lease is through. I have US Bank on one car and Ally for another and the process is different. For US Bank, if the dealer buys it out, you’re still on the hook for all remaining lease payments, which is absolutely absurd. The dealer and I were on the phone with US Bank and couldn’t believe what we were hearing.

So you don’t pay tax again on the residual buyout price in Maryland? The MVA just sent me an email saying you do. Does anyone have an updated link that shows you don’t? That link is not working for me. Thanks!

This looks to confirm that you don’t get charged tax again…
MARYLAND VEHICLE LAW §13-810
Excise tax exemptions – Certain vehicles are exempt from the excise tax imposed. These excise tax
exemptions are found under article §13-810 Exemptions of the Maryland Vehicle Law, which is a follows:
…
(11) A vehicle transferred to a lessee who exercises an option under a vehicle leasing
agreement for an initial term of more than 180 consecutive days to purchase the leased vehicle at the end of
the lease.