New Jeep leased in AZ and brought to California the same day. We paid our lease in advance instead of making payments. about $18k total including about $1,500 in taxes. Jeep is valued at about 60k Trying to register in CA 
DMV has charged us $4,000 more in taxes and are asking for the original title to register.
We thought that we only paid tax on our lease amount?
The dealer/financer gave us a power of attorney and we have the AZ title copy.
Any help would be appreciated.
Did the AZ dealer register the car in AZ or CA? They canât complete the registration without a Smog/VIN scan, but half registered in CA is much easier than fully registered in AZ (which means waiting on the title work to move it).
CA taxes on the lease payment, if you did a 1-pay itâs possible they hit you for all of it, but it should be 1/4 to 1/3 what they charged you depending on your tax rate.
It has title in Arizona but not registers there. We took to dmv did the smog, and vin verification. We paid $1500ish in taxes when we signed the lease paperwork in Arizona. Ca dmv charged us $4,000 to get temporary registration. They are saying we are responsible for the the sales tax on the full value of car. I called the DMV today and they said normally it would have been paid by the finance company. It didnât sound right to me? Does that make any sense? Or are they wrong?
Normally it is paid by the leasing company, yes. California should only charge you sales tax on the full price of the car if you purchase it. And the dealer in Arizona should not have issued the title in Arizona if the car was being sold to someone out of state
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So what do we do now? Weâve paid the tax on the full price of the vehicle that we are keeping for 3 years. The dealer knew we were taking of state and gave us power of attorney.
I reread our paperwork and it doesnât look like a proper âtitleâ it doesnât have a state listed on the Arizona paperwork and the dealer gave us information for purchasing a vehicle for out of state.
I would call the leasing company in the morning to get their take, and undoubtedly after that you will probably have to speak with the dealer. If the tag and title work hasnât been submitted they can still record it in CA, I donât know AZ taxation off hand but they can cut a check if they mis-collected that. Youâll have to talk to Ca DMV about a refund for the taxes you paid (Iâd call customer service tomorrow morning before I went in).
The dealer doesnât have the title ever, itâs the MSO which you need to title it first in whatever state. As long as they didnât file it with AZ you wonât have that delay at least.
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You just need to ask for supervisor/manager or hope you get a worker that knows what to do. I struggled with this on all three Jeeps I got out of state. Every time they tried to charge me full sales tax even though I repeatedly informed them it was a lease. Eventually theyâd ask around and someone would be knowledgeable enough to show them what to do.
You should have the POA, manufacturer statement of origin (probably the âtitleâ youâre referring too), and theyâll want a statement of facts (REG 256) usually from CCAP stating that itâs a lease and tax is collected on your monthly payment. Iâm not sure if that would be the case on a one-pay though.
If you already paid the $4k Iâd be looking to get that refunded ASAP
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I think I need the statement of facts that might fix the problem. The dmv doesnât feel like any of our money is going to CA and they keep saying we are responsible for the full purchase price taxes. Itâs soooo frustrating!! We will make some more phone calls tomorrow. I feel like the 4 thousand is gone forever.
The same exact thing (almost) happened to me and I can tell you itâs 100% because of a DMV employee who didnât realize the car is a lease and thought itâs a purchase. I leased a 4xe from @Clutchâs AZ dealer, did a one-pay lease, picked up the car in person, got all the necessary paperwork from the dealer, did the SMOG and VIN verification, and took my car to register it at the CA DMV as Iâve done a dozen times with other out-of-state leases. Only difference was it was a one-pay lease vs. traditional monthly.
Unfortunately, the CA DMV personnel are not very savvy and have no clue what a one-pay lease is. They saw a lump sum payment on the lease agreement and thought it was a purchase. After arguing with the DMV employee for 30 min, I escalated things to a manager and educated their entire staff on what a one-pay lease is and that the taxes on a one-pay lease are handled exactly the same as a traditional monthly lease. Not to mention the paperwork clearly indicated Lease Agreement and not Purchase Agreement. Finally, they realized the mistake and didnât charge me the $5,xxx they were about to.
If youâve already paid, I would follow up with the DMV immediately and get that refunded. Itâs simply a DMV employee error and you shouldnât have to shoulder the burden of their screwup. Hope that helps!
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My experience was a nightmare. I called CCAP for 2 months asking for the statement of facts before finally receiving it on my first one. On my second one they let me fill it out myself, affirming that taxes are collected monthly. Youâll just need to find their CA tax ID number. If you paid the $1,500 to the AZ dealer I feel like they shouldâve included a check with your paperwork for the taxes. Thatâs what all my out of state dealers did.
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The taxes are technically collected by the bank (in this case CCAP). The dealer is collecting that on their behalf. The only thing OP should be paying for is the registration dues (usually around $600-800 depending on the selling price of the car). I donât believe AZ dealers collect reg dues for out-of-state leases - itâs on the customer to pay for the reg dues when they register the car in person at the CA DMV.
Thank you! Iâve called and they keep telling me the taxes are my responsibility because the dealer didnât pay them. One person on an online chat told me what to do and how to fix it and then the manger at our local office said we were wrong. It sooooo frustrating!!!
That would be 100% correct IF it was a purchase. The dealer doesnât pay for taxes on a lease to the DMV, they would only collect taxes and pay that to the DMV on a purchase. If the dealer is handling the registration for you, theyâll collect the reg dues from you and pay that to the DMV, but not the taxes. Same as when you lease a car directly from a CA dealer - you pay your monthly payment and sales tax on the monthly payment each month to the bank, you donât separately pay for taxes to the DMV on a lease.
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Thank you all sooooo much! Today I called the CA tax board and after lots of transferring and researching they said I was responsible for the taxes on the full value of the vehicle 
But I also called a licensed DMV outpost place and the woman there said all of the things you have advised and said she can process it and get us our 4K back. So we are headed there now. Wish us luck!
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Taxed on the monthly. Itâs the registration thatâs a killer, and AZ has a stupid formula. I just did an M5, and it was $1,900+ on a non-Comp for the registration alone! Even on a cheaper car, itâs a $1,000 registration.
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Yes, DMV employees are not trained properly⌠as everyone else said-they shouldâve only charged you the reg. fee and nothing else. Do demand a refund and you will get it. You shouldâve contacted CCAP and asked for a Title be sent to your local DMV along with their (CCAP) CA TAX ID statement of facts so that DMV has proof of them paying the tax for you. Itâs a simple mistake, but now you will know what to do for your next one⌠and enjoy this one
You pay tax on
- Lease Amount
- Any Rebates
- Any discount from MSRP
Itâs fun.
I do not believe you pay sales tax on a discount from MSRP in California.
That would be crazy 
Sales tax is on the sales price
And for a lease the monthly payment