Selling Lease Buyout CA Sales Tax

[Andrew_Scott]

My lease for a 2019 Hyundai Ioniq Electric (Limited Trim) is up on Nov. 8.

My buyout is $15,500 and I have a friend who has offered me $23,500 for it (same offer I got from Carvana).

I plan on buying it out and selling it for profit, but wondering if anyone can guide me on the 10 day California sales tax law if I resell the car within 10 days of purchase. Here’s a few questions:

1. Do I need to get the title from Hyundai within 10 days in order to “sell” it to my friend?

2. My friend is ok with buying the car from me before the title come in and then transferring it to him once I have it in hand. Is there anyway to document that I “sold” the car to him within the 10 days?

3. Do I pay Hyundai the sales tax on the $15,500 buyout price and then it is refunded when I sell it within 10 days? I know I’ve payed sales tax at point of sale when purchasing a car before…

[jeisensc]

You’re looking for

California 10 day tax exempt For lease buyout

Hi I have looked thoroughly here and this topic has not been discussed. In CA, you are allowed to payoff your leased car in order to resell it without paying taxes on the payoff IF you can sell it back and to a third party which would need to register the car within ten days of the original leasee recieving the title form the lessor company. BUT YOU HAVE TO MAKE SURE THE CAR IS TRANSFERED TO THE NEW ONWER WITHIN 10 days. Now is the tricky part. What if I payoff the car and sell it to s deal…

tl;dr: You have to get the released title from HMF, reregister in your name & pay sales tax, then the 10-day timer starts - after which you can sell to your friend and apply for the sales tax to be refunded. Well documented if you search here.

[forbs]

Hyundai is a little weird because they collect sales tax but does not forward any paper that says they did, and you get double taxed

[Andrew_Scott]

Thanks for the replies. I got my buyout quote from Hyundai Finance and it looks like they are including Sales Tax in the quote. Is there any way around this? Do I go ahead with the buyout and then submit a form to get the taxes back for the CA sales tax?

Sorry if this has been discussed elswhere, but I couldnt find documentation of what to do with my exact situation (Hyundai Finance, no 3rd party sale allowed, selling to a private party, etc.)

[forbs]

Call them ahead and say you will pay Tax separately and give you a quote without tax.

[Andrew_Scott]

I just got off the phone with them and they said that they cant provide a buyout without sales tax and that it had to be paid as part of the buyout. Any suggestions for next steps?

[forbs]

That’s going to be rough, that’s all I can say.

Use a Dealer to process it and see if they can not charge you a fee. Nevermind, then you can’t get a refund.