Hi, Texan here.
If I lease a vehicle, and have tax credits applied, then decide to buyout the lease at the end of my lease, do I owe any sales tax when I buyout the lease? I’ve searched for this and haven’t found a very clear answer.
Thanks!
I think it doesn’t matter if you applied tax credits at the time of lease. When you are buying the car at end of the lease, you have to pay tax on your buy out/residual value.
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Yup, you pay the tax twice unfortunately (or just once if you had tax credits for the initial lease). There are a couple of other options to minimise this if you plan to own the vehicle longer term such as BMWs Owners Choice which is designed to act like a lease, but with the same benefits of a loan.
I thought Texas has a clause where you get the credit for any tax paid at inception, if buying the car out of a lease.
Taxed twice
This is what I was trying to get information on. I found some limited info on it but I have no clue.
It’s confusing, information online varies. The actual Texas statue indicates that you have to pay tax twice.
Searing on bimmerfest, general consensus seems to also be you pay the tax twice.
Maybe someone can follow this up with a snarky comment about blue state taxes… Wait, NM.
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Thank you for that bimmerfest link. That explains it.