Background: At the end of August 2024, I purchased a 2024 Tesla Model X Plaid (pre-owned, but under 3000 miles). I used a lease-like balloon loan to finance it (with the return option after 35 months). The car was purchased out-of-state and shipped to New Jersey (delivery took place before the end of August).
Issue: there were some delays, and it took a while before I could go to the DMV and register it, which happened today (10/28/2024). Upon getting to the DMV clerk, I was asked: “You know you have to pay taxes and this, right?”. I said “You mean fees: title, plates, registration, EV annual fee”. They said: “No, sales tax”.
That’s where the issue started. Their system said ai had to pay sales tax. I pushed back, asked to speak to a couple of supervisors and the manager of the branch, showing the law that states the following: “
Sales, Leases, and Rentals Prior to October 1, 2024
The New Jersey Sales and Use Tax Act provides a sales and use tax exemption for zero emission vehicles, which are vehicles certified pursuant to the California Air Resources Board zero emission standards for the model year.
The exemption is NOT applicable to partial zero emission vehicles which includes hybrids. The exemption is also NOT applicable to labor or parts for qualified vehicles.
The Sales and Use Tax Act defines “sale” to include rentals and leases. N.J.S.A. 54:32B-2(f). Thus, the exemption is applicable to the sale, rental, or lease of a new or used zero emission motor vehicle delivered prior October 1, 2024. In order to document the exemption for the sale, rental, or lease of a qualified zero emission vehicle prior to October 1, 2024, the customer should fully complete an Exempt Use Certificate (Form ST-4) with “N.J.S.A. 54:32B-8.55” as the statutory reference.”
Long story short, I was unable to get this “overruled” at the DMV (or MVC, rather, as it’s called in NJ), as the system did not allow me to register and get my plates without paying, and conceded to pay the sales tax, and request a refund afterwards.
Then came the kicker, it was not the half sales tax that was applied (3.3125%), but the full sales tax (6.625%), on the full purchase price (since this was financed, not leased).
I’m not sure if it was just my bad luck, with a bunch of folks that didn’t know what they were doing, or a systemic issue in how the system was set up after October 1st, but hoping someone here might know more. If not, let this act as a PSA for anyone else in a similar situation.
@z0lt3c I think you recently did a balloon loan on a Mercedes, and I think you’re in NJ. Did you buy from out of state? Any weirdness at the MVC in your case, with the sales tax?
