I signed the below lease in Maryland on Friday and am registering the vehicle in PA. Does it appear I’ve been charged tax on the large rebates? My cash out of pocked was $290.01. It’s my understanding PA doesn’t tax rebates but maybe Maryland does and the dealer charged me anyway? If I shouldn’t have been charged, can I get the money back?
Google says …
Tax on Capitalized Cost Reduction: Pennsylvania taxes any upfront payment that reduces the capitalized cost, such as a down payment, trade-in, or rebate. These amounts are subject to sales tax.
Interesting, because I signed a different lease just in May through a NJ dealer and that doesn’t show any sales/use tax in that section 5 like the MD lease shows $907.98 and $453.99. Maybe it’s just rolled in differently?
This is incorrect. In PA, no tax on any rebates or trades.
can you post your best attempt at recreating via LH calc?
What is your tax rate for the car - assuming 6% but not sure if you live in Philly or Allegheny County.
It does seem like you were taxed on the rebates and also your monthly tax might be too high depending on where you live.
The good thing is tax is different from a normal contract mistake you might make where you agree to pay too much. It doesn’t matter what you sign, a the finance company cannot keep tax money in excise of that which they should pay. Bad news is trying to work through that with people who are not very smart - an issue I have had to deal with a few times with the annual car tax in Va.
PA is 9% tax on vehicle leases in all but 2 areas. Allegheny is 10% and Philly is 11%, I believe.
Gross cap is 1802 above the agreed upon value of car. What did it go to?
I see what you are saying…so if they had given you the full 16500 as cap cost reduction…your payment would only be 253 per month
Yeah, it’s the $907.98 and $453.99 amounts I’m questioning. So now I’m wondering, when the deal is written up by Honda Financial, what happens if indeed I shouldn’t have paid those two amounts. Will they cut me a check or does it go back to dealer?
This was 4 days ago? Maybe there is still time to correct it
Setting aside the paperwork for now, what offer did you agree to? Was there a pencil sheet or equivalent given?
The monthly payment of $295 was the agreed amount.
