I am interested in a lease transfer of BMW . The car I am interested in is registered to NY state. It’s more than a year old.
MSRP: $52000
Monthly payment (pre-tax): $400
I am a resident of the state of Virginia (20171). What taxes do I have to pay if I were to take over the lease .i.e., to get a VA title and registration? The sales tax for the car was already paid by the previous owner in NY.
I tried looking this online and there was no direct answer. It would be helpful if you can help me find this information. Thanks in advance.
P.S. I am aware of the BMW Transfer Fee (500$) and the Property Tax imposed on VA automobiles.
VERY slippery question to answer. Its a massive grey area. A few things,
You will pay $400 a month, if you are assuming a lease where sales tax is paid monthly you should talk to the company you are assuming the lease with. They will back the monthly sales tax out of the payment. Thats good news.
With three different leases assumed from other states and registered in VA I literally had three different experiences.
A. Assumed BMW lease from NY. BMW provided a letter saying tax was already paid and that I don’t owe anything. Person at the DMV never asked to see any proof of tax paid. Easy transaction no extra tax paid
B. Another BMW assumed from another state. DMV person asked to see proof of tax paid, I show her the letter from BMW, no extra tax paid.
C. Nissan assumed from another person in VA. No letter provided by NMAC. No extra tax paid, however she said if I purchased the car at the end of the lease I would have to pay VA sales tax.
In a nutshell, its a massive grey area and the DMV does not seem to know how to handle it. BMW seems to provide a letter saying tax was paid. Make sure you get that and you should be okay based on my experience.
Oh and here is where VA also still it to you. No matter what happens above from a sales tax perspective you WILL have to pay personal property tax and that is based on the book value. On a 50K car that could easily be 2K a year. Gotta love the VA double tax hit, sales and personal property tax.
Can you brief a little more on this? I am assuming a lease from BMW FS and what I understand from the leasing document is that the taxes are part of the monthly payment.
Sorry should have been more clear. Taxes on leases are all over the place across the country. Florida add tax to the monthly and you back that out in VA. Pretty sure NY you pay tax upfront so you cannot back it out in VA.
A lessee may take credit for legally imposed sales, use, or similar tax paid to another state by the lessee or the lessor on the leased motor vehicle before that vehicle becomes subject to the Texas motor vehicle use tax imposed by Tax Code, §152.022.
Disclaimer: I’m not a lawyer. My interpretation is because the leased vehicle is always registered to BMW the tax is paid to the state towards that vehicle and is tied to the lessor (BMW) and thus the above condition would apply.
I have heard stories though that it can depend who you speak to at the DMV or county tax assessor, it’s a real mess of a system. I’ve read some people have paid zero tax and others 6.25% on the original sale amount. If you want to get a definitive answer speak to the Texas Comptroller as they administrate tax affairs. I’d be interested to know what they say.
