3 years ago, I took over a BMW lease from someone in PA and did not have to pay sales tax when I registered it in VA. BMWFS seemed very knowledgeable about what the VA DMV would ask for and sent the exact paperwork I needed when I went to the DMV to register, which included, among other documents, a letter stating that taxes had already been paid in another state. Made an already sweet deal even sweeter when my monthly payment was $30 less than I anticipated. FWIW, I was an Alexandria City resident at the time.
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Hello fellow Hokie,
Thanks for the tip. Looking at taking over an m340i or m2 in the near future. Will make sure I get all the ammo from BMW before registering.
Report back when you do!
Good luck with it. I think even DMV does not exactly know how the takeover taxes work.
Some time ago I was looking to takeover a lease from someone in NY, I reached out to DMV via online form, explained what Iām going to do and asked if VA taxes would be due and how itās going to be calculated. I got a call the next day - yes you have to pay taxes and itās going to be a full original sale price of the vehicle from 15 months ago. That response killed the deal.
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Bringing this topic back up regarding a question on VA property taxes.
We turned in a lease in May of this year back to Nissan (we went w/another lease with another brand). We just received a bill from Nissan that we owe due to the property tax on the old lease that was turned in back in May 2020. I wanted to validate my thinkingā¦
Am I responsible to pay for a pro-rated amount of the property tax since we turned it back in the month of May? - example: I would owe 42% of the total property tax as I had the vehicle for 5 out of 12 months of this year?
Wanted to confirm before I call Nissan to get the full details and see if they are trying to charge me the full personal property tax or a portion.
Thanks!
Nissan should bill you prorated amount (Jan 1- May XX) that they received from your county. But make sure they did not send you estimated amount of property tax.
Perfect - appreciate the response and exactly what I was thinking. Much appreciated!
Should is the operative word in Ursusā response. I was debating when exactly to sell my MDX and it was right around the time the property tax for whole year was due. I called Acura to see if they would prorate it based on sale date but they said no since the bill would be overdue before the County got them the new prorated bill. So I paid whole bill and am awaiting refund from Acura - which is going poorly since they want me to return my plates to DMV but you canāt do online plate return for a lease and DMV isnāt accepting in person plate returns due to Covid restrictions.
I refused to pay Volvoās estimated tax until they received the bill from the county and then billed me again for the actual amount. It was like $400 less 
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Also when you āturned in the leaseā did you make sure it was removed from your local tax perspective? you have to follow up with the DMV/local tax office to make sure its off the tax rolls. I have been burned by this in the past.
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Yep, I pay close to 4k a year for my GLS as property tax on top of the 4.15% sales tax I paid when I leased it
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Interesting they sent an estimated bill. Acura just waited until they got the bill from the County.
Also interesting the amount was too low. Arlington has repeatedly billed me for more to way more than my car was worth.
I looked and it seems like different counties use different NADA guides. For example, Arlington uses clean loan value and Fairfax uses clean trade. Clean loan is much higher since itās the retail value of the car versus the trade in value of the car for fairfaxās clean trade policy.
No, Volvo overestimated and billed me for something like whole year instead of 4 months.
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Yeah its total BS the way leases are taxed in VA. Iām working with a delegate who is pushing for an electric car state subsidy and I also pointed out that like 80% of electric cars and leased and would have to make leasing more attractive in VA for electric cars to catch on.
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What reps are you working with? I briefly talked to Del.
Hope about some sort of electric car offset for the annual car tax. I got the sense an electric car credit is a tough pill to swallow for all Rs and non-NoVa Dās since it is very much a give away to NoVa (not many electric cars in southwest VA).
Iāve said it before and Iāll say it again, itās unsurprising that a system created to tax chattel slavery is āBSā in the 21st century.
David Reid is leading the charge. I have to check but the study should be done this month. He is pushing for a 2K credit bumped to 3K for low income. Has to be purchased from a VA dealer. I would be happy with that. If they really wanted to drive adoption they would throw in a 50% personal property tax subsidy. Totally understand the lack of electric cars in the rest of the state but a good portion of VAās overall tax comes from NOVA. There are about 8.5M residents in VA. About ~2M are in NOVA and the average property/personal property tax bills in NOVA are about twice as large compared to the rest of the state. Would not surprise me if 50%+ of the tax base comes from NOVA. Geographically small revenue large.
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Thanks for the info. Iāll definitely write a few letters in support if bill gets filed.
A credit for the annual car tax makes is more logical (encourages long term ownership) but would be so much more complicated/impossible to administer that the straight purchase credit makes more sense.
And yes, I understand that NoVa effectively funds the rest of the Commonwealth (although through income tax - personal and real property taxes are raised and spent locally).
Good stuff. The short term issue is something like 80% of electric cars are leased, I think pushing adoption over the next 5 years will have to focus on that purchasing mechanism. Of course Iām biased but leasing EVs makes more sense today.
- EV tech is evolving quickly. If you buy you are tied to a point in time technology
- Batteries are getting better but they still degrade over time
- Range continues to grow at a lower pricepoint
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The issue is the State tax on leased cars isnāt actually that bad. Sure taxing the whole sales price is rough but itās only 4.15%. Many jurisdictions in California charge double that rate. So its pretty much a wash because they pay (very roughly) twice the tax on half the amount. For latter reference, VA sales tax would be $2,075 on a 50k sales price.
The real issue is the annual car tax. That tax penalizes possession, whether through lease or purchase, of more expensive cars. Right now, electric cars are much more expensive than comperable ICE cars. So, in Arlington, Iād be paying the County on average $3k ANNUALLY over three years for a $80k Model S. A roughly similar sized ICE car, an Accord 2.0 Touring, would result in property taxes of 800 bucks per year over three years.
So my point is that VA tax code doesnāt really discourage leasing as much as it discourages possession of expensive cars. Which at present actively discourages the purchase or lease of electric cars.
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Can you get them to remove the EV tax, too? EV drivers currently pay an additional annual tax to make up for not buying gas (which the state receives taxes from).
The VA property tax on vehicles is the highest in the country. Thereās no rhyme or reason behind how itās calculated, either, and even when the State makes a mistake calculating it, you still have to pay the wrong amount upfront and then hope they send you a refund months later. I actually had to contact my FFX County elected supervisorās staff to help me sort out an issue this year.