I’m in Texas, and if I swap into someone else’s lease with few months remaining, say 10, or 12… I’m having a hard time figuring out how much sales tax I will pay in Texas when I make that move.
Does anyone have any insight there? Thanks!
Since you will be assuming a lease there should be no sales tax due since there is not a sale involved. The vehicle will still be owned by the lessor… only the lessee is changing. This assumes the vehicle was originally sold in Texas and the sales tax was already paid upfront.
If the vehicle is from another state where sales tax is not paid upfront, then you may own sales tax when it is titled in Texas. If the other states does charge sales tax upfront, you should be able to claim a credit for the sales tax already paid.
What @ddpg said is 100% correct.
Since all leases in Texas are taxed up 6.25% front on the full selling price of the vehicle, no additional taxes are due on a lease assumption within Texas.
Out of state assumptions being brought into Texas will vary based on specific situation.
I should have made sure I was clear that I’m inquiring as to what happens if I assume a lease from a vehicle out of the state.
I’m looking for a short term, so I don’t want to pay a load of sales tax on a car I only have for 10 months.
Also, does this get me the BMW loyalty?
If you assume a BMW lease through BMW FS, you will qualify for BMW loyalty on a new purchase/lease (assuming it is done within the timeframe for loyalty).
Regarding taxes from out of state, you are supposed to owe taxes in this situation minus any credits for already paid taxes in this situation. Sometimes they mess up and charge you the $90 flat fee, but that’s not supposed to happen. You are supposed to pay:
- Registration fee (base fee of $50.75 for passenger vehicles and light trucks),
- Title application fee of $28 or $33, depending on the county,
- State portion of the vehicle inspection fee (up to $30.75)
- Local county fees (up to $31.50)
- 6.25% vehicle sales tax (minus credits – again highly situationally dependent)
- $1 Insurance verification fee
- $4.75 processing and handling fee
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My feeling is that if I assume an out of state lease, Texas is going to attempt to make me pay sales tax on their appraisal value of the vehicle regardless of the remaining lease months or taxes paid by the previous owner in their own state.
I do not know if this is true or not.
If it is true, then this makes assuming a lease with 10 months left for example, much more expensive over those 10 months.
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