Sales tax in ny

Sunsets over the Barnegat Bay and summer days spent on the beach can’t be beat

Lower property taxes than Westchester County, lower cost of living than NYS, beautiful beaches, THE East Coast gambling destination, close to NYC and Philly, the best pizza and bagels. It’s expensive because people want to live here

That’s harsh coming from a Devil’s fan.


If you cap NY sales tax, they most certainly do tax sales tax. Below is a memo I sent to Glen Cove Volvo a few years ago as a sales manager was wondering how sales tax is computed (a few minor details are missing as the dealer already had them)…

Also, if you carefully read some of the examples in Pub 839 posted above, you will discover that they do indeed compute tax on tax. You may also want to check my previous posts regarding NY sales tax.

Delta let’s sue ny for millions in damage for this fraud :flushed::exploding_head:

I strive in self awareness lol. My cynicism may be the most jersey trait I have

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You’re on your own Lax… I’m not from NY (thank God!) so, I can’t file a lawsuit. I doubt it would do any good as NY is extremely corrupt for lots of reasons. Disgraceful!

Haha thanks delta. Ok so my future leases in this miserable state. What would be best to circumvent msds? Guessing bc I’m registering car in ny I have no way to get around awful tax laws

Or you could just check the NY tax attorney, @AP919 's post, that @ursus references, which sums it up nicely.


Okay, sorry, I was finishing up something at work, and I wanted to do a little research to back up my points, haha. Standard disclaimer – I am not providing tax advice, nor is this to be construed as any legal or tax advice.

@Britten440 – First and foremost, sales tax in NY is NOT 9%. The state rate is 4%, and then counties and some municipalities have their own rates. Nassau is 4.625% (8.625% total), for instance. Westchester is 3.375% (7.375% total), but Yonkers and White Plains both have an additional 1%, bringing it to 8.375% in those two. Also, not everyone is wise, so many people, even on Swap-a-Lease, paid the tax up-front, so there’s no premium on that.

Also, I apologize, but this is going to be another “not short” post!

First of all, Pub. 839 (linked above) clearly states on page 17 that you don’t pay the NY tax upfront, provided certain conditions are met. Dealers are equipped for this, especially in the tri-state area, as they also are to register cars in the surrounding states, i.e. NY/CT/NJ, etc., but also other surrounding states and even FL, with few exceptions.

From Pub. 839:
New York State and local sales taxes do not apply to the long-term lease of a motor vehicle, even if the lessee enters into the lease and takes physical possession of the vehicle in New York State, if at the time of taking delivery, all of the following conditions are met:
• the lessee is a nonresident of New York State;
• the lessee has no permanent place of abode in New York State;
• the lessee is not engaged in carrying on in New York State any employment, trade, business, or profession in which the vehicle will be used in this state (this means you use the vehicle for business purposes, not someone driving in for work from NJ or CT or something like that);
• the dealer does not issue to the lessee a New York State temporary or other similar certificate of registration as provided in section 420 or 420-a of the New York Vehicle and Traffic Law;
• the lessee does not register the vehicle in New York State prior to registering the vehicle in another state or jurisdiction; and
• prior to the time the lessee takes delivery of the vehicle, the lessee gives the dealer a properly completed Form DTF-820, Certificate of Nonresidency of New York State and/or Local Taxing Jurisdiction.

To confirm all of this, I did a little research for surrounding states/states that will commonly have vehicles in this situation, including FL.

If Connecticut use tax applies to a vehicle when another state’s sales or use tax had been paid, the tax paid to the other state can be used to offset Connecticut use tax, i.e. a tax credit. [Conn. Agencies Regs. §12-426-16a(g)]

CT also says (12-426-16a(e)):

No sales or use tax shall be due on the sale or transfer within the state of:

A motor vehicle, provided such motor vehicle is sold for use exclusively without this state, and such motor vehicle is not registered with the department of motor vehicles (meaning it’s sold to a nonresident who will not be registering the car in CT–think, NY resident situation);

If, at the time of sale or transfer of a motor vehicle, snowmobile or vessel without this state, a purchaser or transferee is a resident of another state, but subsequently becomes a resident of this state, no use tax shall be due, provided such purchaser or transferee had registered such motor vehicle, snowmobile or vessel in another state for at least thirty days prior to the establishment of a Connecticut residence, and such purchaser or transferee did not not purchase such motor vehicle, snowmobile or vessel for use within this state. (If you bought a car outside of CT while a nonresident, no tax is due, so long as it was registered for at least 30 days elsewhere.)

Florida is certainly the problem child for much of this and differs from other states.

Any motor vehicle bought outside Florida and titled, registered, or licensed in Florida is presumed to be taxable. This can be rebutted only by evidence that the owner bought it in another state, U.S. territory, or the District of Columbia 6 months or more before it is brought into the state, and that it was used for 6 months or more under conditions giving rise to the taxing jurisdiction of the other state, U.S. territory, or the District. [Fla. Stat. §212.06(10)]

Taxes paid in FL and credit to other states: A Tax Information Publication was issued that contains a list of motor vehicle sales tax rates by state as of December 31, 2018. Arkansas, Mississippi, and West Virginia impose a sales tax on motor vehicles, but DO NOT allow a credit for taxes paid to Florida. Residents of these states must pay sales tax to Florida at the rate imposed by their home state when they purchase a vehicle in Florida, and must also pay tax to their home state when the vehicle is licensed in their home state. [Florida Tax Information Publication No. 19A01-01, 01/11/2019]
Florida is well-known for collecting sales tax on tings like this, no matter what. Most states WILL give you a credit for what was paid in FL (only kind of screwed in states with a lower tax rate), and then you pay the difference for that state, e.g. FL is 6%, and if your state is 7%, then you pay 1% to whatever state you are in/register the car.

To that point, for leases or rentals that are at least 12 months, tax is due on the payments if the vehicle is registered in Florida, unless the taxpayer documents use in another state and tax is paid on the lease or rental payments in the other state. [Fla. Stat. §212.05(1)©(2)]

Example: When a car was leased and registered in NY and then removed and registered in FL, there is an exemption from FL sales tax if the taxpayer can document use of the car outside of FL and that tax was paid on the payments in another state. When the other state requires the up-front payment of the tax, FL might allow a credit under certain circumstances.

Motor vehicles sold in another state or territory of the United States and subsequently brought into MA are exempt from use tax if the purchaser or transferee paid sales or use tax on the vehicle to the state or territory in which the sale or transfer occurred; the sales or use tax was paid by the purchaser or transferee and legally due to the state or territory; the purchaser or transferee must not have received or had a right to receive a refund or credit of the sales or use tax from the state or territory where the sale or transfer occurred and the state or territory where the sales or use tax was paid allows a corresponding exemption with respect to motor vehicles sales and use taxes paid to Massachusetts. If this exemption applies, and the rate of tax imposed by the state or territory where the tax was paid is less than that of Massachusetts, the purchaser or transferee must pay a use tax computed by multiplying the sales price of the vehicle by the difference between the Massachusetts rate and the rate imposed by the state or territory where the tax was imposed. [Mass. Regs. Code 830 CMR §64H.25.1(7)(g)]

Example: A CT company registered as an MA vendor does not need to collect tax on motor vehcile sales regardless of the buyers’ intent or lack of intent to register vehicles in MA. Buyers must pay use tax on cars bought out of MA from vendors who are not engaged in business in MA if property brought into MA is to be used in MA. [Massachusetts Letter Ruling No. 85-43, 03/28/1985]

New Jersey
Motor vehicle sales are not subject to state sales and use tax, even where the purchaser takes physical possession of the vehicle within New Jersey, if the purchaser is not a New Jersey resident at the time he takes delivery. The purchaser will not be considered a resident if he establishes that he has no permanent place of abode in the state (i.e. you don’t own a house and don’t rent anything) and is not engaged in carrying on any employment, trade, business or profession in New Jersey in which the vehicle will be used within the state. [N.J. Rev. Stat. §54:32B-10(a) ]
Same thing as above – so long as it’s not a work vehicle, generally where you would have written it off for tax purposes pre-new tax act, you’re good.

Leases or rentals of motor vehicles, trailers, semi-trailers, or aircraft that do not qualify as transportation equipment is sourced as follows (transportation equipment = trains, planes, etc.):

(1) If a lease or rental requires recurring periodic payments, then each periodic payment is sourced to the primary property location, indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, if use of this address does not constitute bad faith. This location is not be altered by intermittent use at different locations. (meaning, payments are sourced to where you have the car registered, so if it’s legally not registered in NJ [think – someone who lives in NJ registers the car in PA at work to try to avoid tax], then it’s exempt from NJ tax.

New York
Motor vehicles sold to nonresidents are not subject to tax under the following conditions:
(1) the purchaser at the time of delivery:
(a) must be a nonresident of NY; (b) must have no permanent place of abode in NY; and © must not be engaged in carrying on a trade, business or profession where the motor vehicle will be used in NY (same as above – don’t use it as a delivery vehicle, for business purposes, etc. Commuting is okay);
(2) the vendor must not issue to the purchaser for the vehicle either a temporary certificate of registration or a temporary registration or other like certificate of registration;
(3) the purchaser must not register the vehicle in NY before registering it in another state; and
4) prior to delivery, the purchaser must furnish to the vendor any affidavit, statement or additional evidence which the Commissioner may require to ensure proper administration of the tax.
[N.Y. Tax Law §1117]

A taxpayer was properly charged sales tax on the total amount of lease payments at the lease inception, but he was not entitled to a refund of NY sales tax paid on a leased vehicle when he moved out of state. If the New York State and local sales tax has been paid and the vehicle is later moved out of NY, the lessee is not entitled to a refund because the entire amount of tax was due at the inception of the lease. [New York Advisory Opinion No. TSB-A-15(50)S, 12/11/2015]* Don’t get screwed by paying the tax up-front. However, @Britten440, this would be your situation. The current owner paid the tax in full, so it’s his fault, not yours, and it shouldn’t be baked into the payments.

A lessee of a new automobile was not entitled to a refund of a prorated portion of the sales tax that he paid to New York on the total amount of lease payments due under a 39-month lease, despite his change of residence from New York to New Jersey and the registration of his leased car in New Jersey only 9 months into the lease term of 39 months. [In the Matter of the Petition of Thomas Gallagher, NYS Tax Appeals Tribunal, [DTA No. 819115, 10/23/2003.]

At the outset of a lease in NY, sales tax is imposed based on the tax rate in effect where the purchaser resides (“special rule”). [New York Sales Tax Bulletin No. TB-ST-590, 02/03/2014]

A claim for the refund of sales tax paid on the lease of a car was denied when the taxpayer paid the full amount of sales tax due on the lease in the amount of $1,938.54. A little over a year later, the taxpayer relocated to Arizona and registered his car there. New York law provides that the amount of tax due for the entire period of the lease is collected at the inception of the lease and no refund or credit will be allowed based upon the fact that receipts due under the lease are not actually paid as in the case of early termination of a lease. [In the Matter of the Petition of Pollack, NYS Division of Tax Appeals, ALJ, Dkt. No. 827607, 08/09/2018.

Also, for Swap-a-Lease purposes:
The taxpayer paid the entire amount of sales tax due on a 36-month lease of a car. Before the end of the lease period, the lease was transferred to a third party and sought a refund of the sales tax he claimed was due from the remainder of the lease. A refund of tax is not permitted in instances where there is an early termination of a lease, and “all lease payments are deemed to have been paid and are subject to tax as of the time of the first payment under the lease.” [In the Matter of the Petition of Greenfield, N.Y.S. Division of Tax Appeals, ALJ, Dkt. No. 827851, 09/27/2018.]

If you have any questions about all this mishigas, just ask!


Why not just move to Ohio with Delta and lease the car there? Imagine the tax savings on your $500 a month Honda Civic.

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You mind if I pin this in the FAQ? This is some good shit.


Sure, thanks! I just don’t know why some of the text is huge; there’s no way to adjust it that I can see.

you have a - - - (dash dash dash) between paragraphs where the text is larger. That would cause the bold, bigger text.

Oh, that’s. I was just trying to separate things. I’ll fix it.

Same thing my company did. FiDi to Hoboken…fun. But we still have offices in the city, anyway, just not for my group.

Well, I attempted to post it, however, all FAQ posts need approved by @michael, so when he gets around to it, and if he feels it’s justified, you’ll be LH famous!

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WOW @AP919… this is great… never been some intrigued by sales tax implications. :slight_smile:

There is a huge need for this type of information within the transfer community as Swapalease avoids the topic completely (for legitimate reasons) and people can end up paying significantly more than they were anticipating and only find out after the fact.

I recall reading there are scenarios where you could avoid paying a good deal of tax based on the individual states involved in the transfer due to these varying rules.

Regarding the Swapalease question, I know I am not personally being penalized, but if the identical car is listed for $500/month one in PA and one in NY (and taxes weren’t paid upfront), The NY would automatically be $533/month when I transfer it to NJ, while the PA could possibly go down based on the tax rate. And technically, NJ is taxing me on NY tax if the tax is rolled into the payment.

Is that correct from your perspective?

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Just for a point of reference, PA taxes the depreciation + rent charge (monthly payment) @ 9-11% depending on county it is registered in. Philadelphia county gets hit at 11%, Allegheny county (Pittsburgh) at 10%. The rest of the state is 9%.

This is a tricky situation, because the tax payment moves with the person, not with the property, unlike real property taxes (real estate). So the only time you’d really be paying more is if the tax is baked into the payment, and the leasing company won’t unwind it.

I didn’t see specific information for NJ with regards to bringing in a vehicle when I was doing quick search, but this piece alone leads me to think that they’re going to tax you on it, no matter where it comes from: (1) If a lease or rental requires recurring periodic payments, then each periodic payment is sourced to the primary property location, indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, if use of this address does not constitute bad faith. This location is not be altered by intermittent use at different locations.

You register the car in NJ, you’ll be taxed there. You weren’t the one who paid any tax when the car was purchased originally, so you’re SOL.

Plus, it’s NJ, they want the revenue!

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OK…and what’s your solution to these scenarios? You can capitalize the tax and pay it every month (plus interest)…you’re not getting away from it.

In fact, if you move to a state that charges tax on the monthly payment, you’re going to be double-taxed (i.e. taxed on a monthly payment that already capped NY taxes)…if you paid the tax upfront, you’d pay monthly tax in the new state on a lower basis.