Sale tax and use tax question regarding Leasing and lease buy out in Maine

I am interested in leasing a toyota veichle with a MSRP around $45,000. I intend to do an early buy out so the total cost of ownership can be optimized.

I just moved to Maine recently and this will be my first leased car. My questions are:

  1. Does Maine charge you sales tax upfront for the entire MSRP when you sign the lease contract?
  2. If I do early buy out, I will pay sales tax on the adjusted capital cost or MSRP?
  3. It looks I will have to pay first year use Tax twice: the use tax when sign the lease and when do the buy out. Is my understandng right?


For quesition 1, I found something from one Maine tax document. Page 4 the Second to last paragraph says “The tax is due in the month in which the lease begins. The sale price consists of the total monthly lease payments plus the equity of any trade-in plus any cash down payment. Total
monthly lease payments are arrived at by multiplying the dollar amount of each lease
payment by the number of payments in the lease term. Trade-in equity is the value of any
trade-in that reduces the cost of the lease. (Note: unlike sales of automobiles, no deduction
is allowed for trade-in allowances.) “Cash down payment” means any initial cash payment
that reduces the cost of the lease, including rebates applied to the lease.
IB20 FINAL Lease and Rental Transactions 2022_11_15.pdf (193.1 KB)

It looks Maine is also a double tax place for lease early buy out as it requires you pay tax when you sign the lease and when you buy out. And even worse, no tax reduction on trade-in. One thing I am super confused is it seems saying that The sales tax base = monthly payment x36 + trade-in + down payment. This would means you pay more tax if you trade in or put downpayment?

Have lived in maine since 2013, welcome!

I am pretty sure that the sales taxes are reduced if you trade in a vehicle with equity.

The leasehackr calc treats taxes this way and I recall a family friend who works in management at patriot subaru telling me the same.

The use tax is based on 100% of the msrp which stinks, but if you are transferring reg from an existing vehicle you can shorten year 1 on a new car which is a benefit.

Which car are you getting? I’m guessing an EV to get the credit hence early buyout.

RAV4 prime. I got an offer $1500 below MSRP from an out of state dealer. The sale tax and use tax situation really confuse me a lot.

My last lease was transacted in mass; of that’s the case with yours then definitely hit me up as the process was complex but not too difficult to manage through.

Use tax is paid at your town hall after you get your temp plates.