So, I’m unlucky enough to live in one of the few states that taxes the whole purchase value of the car, up front, for a lease. That being said, i understand it to be possible to have the trade-in value of a lease applied against a new purchase or lease.
Looking for help from MD lease pros: I currently took over a Ford lease from a NJ resident; lease ending is in 12 mos. It was leased thru Ford Credit. As I understand it, I can go back to Ford, and get a trade-in sales tax credit against the purchase / lease sales tax of a new Ford when the lease is up, next year. Is this because the owner (Ford credit) is the same? The trade-in credit would be based on current market value, or residual?
What happens if I want to lease a different make - they might well accept the lease as a trade-in, and return it for me, but how would I get a sales tax credit if I never took ownership of the vehicle, and lessor isn’t the same?
In this case, I wonder if it is necessary for me to first buy out the lease, then immediately trade it in. (It should have slight positive equity). This would be highly inconvenient as I don’t have 23k of cash sitting around, and a 1-day loan seems a bit ridiculous.
Last question: if I take over a lease from another Maryland lessee, they’ve already paid full 6% sales tax up front. Do I have to repay the 6% sales tax on a lease takeover in MD in a lease takeover, even though it was already paid through that lease?
I’m wondering if that would be a better option than my current out of state takeover scenario. It looks like I will have to pay MD sales tax for the current lease takeover I’m processing, (from NJ). Per the Maryland MVA I have to pay 6% based on NADA retail value. It doesn’t look like I’ll get any credit for the NJ sales tax that was paid up front by the previous lessee. Maybe it would be different if the lease payments included tax?
TL DR; Need to know how sales tax credits work when trading in a leased car in MD for a new purchase/lease, also would like same info on a lease takeover, instate & out of state.