In North Carolina, do you pay sales tax (3%) on the total sales price, or just the deprication (the amount consumed)?
Google is your friend https://www.ncdor.gov/taxes/sales-and-use-tax/lease-or-rental-tangible-personal-property
Normally when people ask simple questions that Google can answer, just including a Google link is sufficient. But your link is confusing. I am an admin lawyer and the answer wasn’t completely clear to me based on the NC website text. The issue is North Carolina charges a highway use tax instead of a personal property tax - which I got from further googling. Seems like you pay 3% on price of car… annually. Although I’m not an expert in weird Mid-atlanic personal property tax schemes rather than normal sales taxes - Virginia does a similarly weird car tax system.
Anyhow, charging 3% on lease payments would not make sense. You lease a car for 300 a month, you would only be paying 9 bucks a month/81 a year.
Well it appears the word ‘gross’ is the important one - ie, what you negotiate as the sales price (affected by rebate/incentive types) is what the 3% is paid on - but it’s not annual
North Carolina resident here. Your lease “tax” payment is 3% of the monthly (so very low compared to other markets) - and one of the reasons I attribute to local dealers giving meager discounts due to payment perception. Additionally you get hit with an annual personal property tax on the vehicle which varies based upon municipality but is typically in the 1% range.
So on my recent Volvo S90 lease (MSRP 60845, selling price 40318 + fees, 30/10, 55% residual, 10 MSDs) - monthly was $311, tax was $9 for a total monthly of $320. Separately, I received a property tax bill in the mail (which needs to be paid prior to receiving a permanent registration) for ~$350 (state of NC thought vehicle was only worth like $38K).
[In the old tax structure, much of the property tax bill would be a deduction against federal income, but now is subject to the rather punitive 10K SALT limits in the tax reform space.]
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Thanks for the answer. Seems like the worst possible system, lot of effort for very little money collected. Makes leasing very attractive.
Care to say what dealer this was? I am local and have started looking into leasing an S90
I’ll PM you the information. 2018 has been a bad year to lease an S90 in the Southern region because the incentives are worse than in rest of country.
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Ok thanks.
That would make sense that deal you posted is wayyyy better than anything else I have seen on here recently but I have only been reading here for a few months.