I just completed the registration for a 4xe with a one pay lease. Due to the way the regulations are worded the TAVT is imposed on sum of the depreciation and the complete one pay amount (which already includes the depreciation). Basically you are adding 6.6% of the one pay amount on to the lease for no reason.
Are you sure? I don’t see anything in how the different TAVT calculation methods that would suggest that’s the case. That seems more like the person doing the paperwork didn’t understand a one pay.
Yep @mllcb42 , I certainly double checked and escalated multiple levels. Here is the “bad” text from the GA Department of Revenue. Text below from MV-7L form. They treat the One Pay as a down payment (bolding mine)
The TAVT Base Value is the total of Depreciation Plus Any Amortized Amounts, including any down payments.
(“Down payments” means cash collected from the lessee at the inception of the lease, including (1) cash supplied as capital cost reduction and (2) any upfront payments by the lessee. Down payments shall not include (1) rebates, noncash credits, or net trade allowances, (2) taxes or fees imposed by law, and (3) monthly lease payments made in advance.)
Down payments shall not include (1) rebates, noncash credits, or net trade allowances, (2) taxes or fees imposed by law, and (3) monthly lease payments made in advance.)
One would believe a One Pay is basically all the monthly lease payments simply paid up front.
Ouch… was in the process of getting a one-pay in GA as well.
I guess the additional 6.6% tax essentially offset the good chunk of the savings from one-pay?
How bizarre. That definitely seems like something that’s been written without an understanding of what a single pay lease is and goes against the intent of what they seem to be looking for. How you’d go about challenging that, though, I don’t know.
Pretty sure you pay the same TAVT upfront if you do a normal lease vs a one time pay.
So if a normal lease, you total up all future lease payments and any upfront down payment, and multiply by 6.6%.
If a one pay, you take the total upfront payment, and multiply by 6.6%.
That’s how things are described, however, the actual form doesn’t seem to take the monthly payment amounts into account.
Including the downpayment amount makes sense, because it’s a cap cost reduction and it reduces the depreciation portion. A single payment shows up differently on the lease, so it doesn’t change the depreciation amount.
Georgia’s auto tax rules aren’t just antiquated, they make NO sense!
You can lease a loaner from an in state dealer and they tax like a normal new lease. If you try to lease a loaner from another state, they tax you on the full price of the car because they consider it “used.” And when you buy a used car from another state and register it in Georgia, they tax you some insane amount not based on the sale price, but based on inflated assessed values they just pull out of a hat (or somewhere else)
Yes. This is what I tried to tell them but unfortunately they did not agree.
I would say about it took out half of the savings but I am still coming out ahead.
Haha. You are totally right. Believe it or not it used to be worse before 2018. When you leased a car you paid tax on the WHOLE PRICE OF THE CAR. Even worse if you bought out the car at the end of the lease you paid tax again on the buyout price. Ask me how I know
Like you and @mllcb42 said this is what I thought should happen but it did not. They double charged the Depreciation (once separately and once included in the Onepay). So the tax was significantly higher (by approximately $900)
When I bought out our lease and moved to GA right after, they made me pay the fee again even though I had paid it already on my previous state. They wouldn’t register the car if I hadn’t paid. Went up and down and there was no way around it. Disappointing rules in GA.
Does that apply to MSDs as well?
I cant imagine how it could
This is mostly a normal tax law almost every state has. If you purchased a car and registered it Washington with no sales tax, California isn’t gonna let you register it there a month later to avoid there sales tax.
Now many states will give you credit for the tax you already paid but not all. Also you are always gonna have registration fees which generally make it disadvantageous to register a car twice over a short period.
I don’t know how to make sense of that, it’s unfair. You paid the sales tax once and registered so that’s done. Now paying the sales tax and registration again in a different state doesn’t seem fair to me.
States like money more than ‘fairness’. Though I’m curious why they charged you tax when you moved? I guess your car had low miles or was new?
Because he bought the car, registered it somewhere else and then promptly moved to Georgia. Every state lets you transfer registration, without paying sales tax, in a car you have owned for at least a year. Some states only make you wait six months. But almost no state is going to let me avoid tax by buying a car in NH, registering it at my in-laws cottage and then transferring registration to another state with a vehicle sales tax.
Also, I realize now OP references fees not taxes and it’s not clear if they realize the difference. In some states, like California, the registration fee is high. You always pay those when you register or renew registration. No state lets you avoid registration fees because you previously registered a car in a different state.