Sales tax on lease takeover? NJ to VA

Ask the Hackrs
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1

I am in the very early stages of considering taking over a lease for a car tagged/kept in NJ. I live in Virginia.

Are there any sales tax considerations I should be aware of? I have been unable to find a clear answer for takeovers specifically. Thank you for any help!

2

A lease assumption form out of state is the equivalent of a transfer from out of state, so the Virginia statute allows a waiver since tax has already been paid… BMW knows this as well as DMV so there is a letter from BMW but DMV will look at the original contract and see taxes paid, when they enter an amount greater than 0, the system 0s out any tax due at the time of registration.

3

Thank you, that is good to know.

I’m new to this process, does this mean I would be registering the vehicle and it wouldn’t stay on the NJ plates because the lessor owns the vehicle?

Should I be worried you know I’m looking at a BMW without me mentioning it?

4

I would suggest getting some more opinions on this.

NJ levies tax upfront on the total of the lease payment.
VA levies tax upfront on the entire selling price.

This typically means VA charges (much) more tax then NJ does, so even if they do recognize the taxes already paid, they will not be sufficient based on VA calculations.

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5

I did a little research and I can register it in my resident state. I’m military stationed in VA. VA’s car tax is cheaper, but not when you take into account entire selling price.

Thank you for the input

6

Always good to get multiple opinions… However in this particular case I will add some credentials… VA resident with over a dozen lease transfers, including the person that took DMV to task in 2008 up through Richmond for not honoring 58.1-2403 as defined… DMVs systems have been updated since that time so it’s not an issue any longer…

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7

Would you mind clarifying 58.1-2403? I read through it but better safe than sorry.

8

#10 is it… In this case there was no sale, BMW maintains ownership the entire time…

  1. Being registered for the first time in the Commonwealth and the applicant holds a valid, assignable title or registration issued to him by another state or a branch of the United States Armed Forces and (i) has owned the vehicle for longer than 12 months or (ii) has owned the vehicle for less than 12 months and provides evidence of a sales tax paid to another state. However, when a vehicle has been purchased by the applicant within the last 12 months and the applicant is unable to provide evidence of a sales tax paid to another state, the applicant shall pay the Virginia sales tax based on the fair market value of the vehicle at the time of registration in Virginia;
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9

Perfect, thank you very much.