Minimizing leasing costs if I'm exiting on my lease

Don’t listen to the armchair tax experts here.

Every time the subject of Texas motor vehicle use tax comes up, someone with questionable reading comprehension jumps in with ‘actually it says 6.25%.’

The two comments above have explained well enough, but kindly notice that my initial comment reads was the case. For me. When I went through the process.

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If you look at Form 130-U, which is the Texas application for title, you can see it exempts new residents from sales tax.

New Texas residents are subject to a $90 use tax on a vehicle brought into this state that was previously registered to the new resident in another state
or foreign country. This is in lieu of the 6.25 percent use tax imposed on a Texas resident.

Since fronk is a Washington resident, he should lease in WA, register the car in WA, then move to TX, and then re-register in Texas and will only pay $90 instead of 6.5% sales tax on the full value of the car. It’s an amazing deal you usually only get once, so take advantage. The 6.25% sales tax on the full value of the car wrecks good lease deals in Texas.

You only have to pay the 6.5% on an out of state lease if you are Texas resident at the time you execute the lease.

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