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Discussion Starter #1
I obtained the lease payoff documents from BMWFS for my 2017 330i. I was fully expecting sales tax to be added to the payoff amount, but it was shown as $0. Does anyone know why this would be? Am I obligated to pay the sales tax some other way, not through BMWFS?
 

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There was discussion on this topic at Ask-A-Dealer forum, it appears sales tax is collected at DMV registration dependent on which states.

If true this will also facilitate 3rd party lease buyout.
 

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It varies by state but in many cases, you pay the sales tax at the time you (re-)title the car. Someone from California who knows the details will no doubt chime in shortly.

Edit: Too slow.... :)
 

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I obtained the lease payoff documents from BMWFS for my 2017 330i. I was fully expecting sales tax to be added to the payoff amount, but it was shown as $0. Does anyone know why this would be? Am I obligated to pay the sales tax some other way, not through BMWFS?
You are obligated. If bmw does not Collect it from you, it will have to be paid when you register the car at dmv
 

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Discussion Starter #5
You are obligated. If bmw does not Collect it from you, it will have to be paid when you register the car at dmv
The car is already registered in my name, however, BMW needs to re-title it to me. Will the DMV notify me that sales tax needs to be paid when they get the re-title request or am I expected to know this and voluntarily pay it?
 

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The car is already registered in my name, however, BMW needs to re-title it to me. Will the DMV notify me that sales tax needs to be paid when they get the re-title request or am I expected to know this and voluntarily pay it?
Check this out. Does your pink slip list two names? When the pink slip is changed to one name, sales tax will be due(unless exempt, e.g. same family transfer, 3rd party buyout).

"Leased vehicles must be registered in the names of both the lessor and the lessee.

"The lessor is designated as LSR; the lessee is designated as LSE. Certificates issued in 1985 or prior may show the lessee as "care of (c/o)" (the "c/o" was part of the address field)."

https://www.dmv.ca.gov/portal/handbook/vehicle-industry-registration-procedures-manual-2/transfers/leased-vehicles/
 

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Discussion Starter #7
Check this out. Does your pink slip list two names? When the pink slip is changed to one name, sales tax will be due(unless exempt, e.g. same family transfer, 3rd party buyout).

"Leased vehicles must be registered in the names of both the lessor and the lessee.

"The lessor is designated as LSR; the lessee is designated as LSE. Certificates issued in 1985 or prior may show the lessee as "care of (c/o)" (the "c/o" was part of the address field)."

https://www.dmv.ca.gov/portal/handbook/vehicle-industry-registration-procedures-manual-2/transfers/leased-vehicles/
In the DMV article you conveniently posted, it says:
Use tax is due. If the lessee:
Buys the vehicle at the end of the lease, use tax is based on the balance owed at the time of lease pay-off.


I'm assuming use tax is the same as sales tax? If so, does DMV bill me?
 

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In the DMV article you conveniently posted, it says:
Use tax is due. If the lessee:
Buys the vehicle at the end of the lease, use tax is based on the balance owed at the time of lease pay-off.


I'm assuming use tax is the same as sales tax? If so, does DMV bill me?
Yes use tax is sales tax on used item. :)

There is no personal experience with lease buyout, but the referenced DMV page says this:

"If the lessor collects use tax when the lease is terminated, a Statement of Facts (REG 256) form completed and signed by the lessor stating the payoff amount, amount of tax collected, and the Board of Equalization tax identification number is required."

So if BMWFS collects use tax, then a REG256 form will be needed from BMWFS as proof of tax collected.

As a leased car in CA is registered under both lessor and lessee, a lease buyout needs to change registration to lessee(the new owner). My guess is that if BMWFS does not collect use tax, then new owner will need to pay [email protected]
 

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My guess is bmw pay off amount shows what you would owe to bmw. If you were to go ahead with buy out they would include sales tax once they know what state transaction is being done in
 

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You should just go through the lease-to-retail at a dealer. Unless you are CPO-ing the car, there isnt much room for funny business and they will add on applicable sales tax at the rate of your garaging address as well as the re-titling of the car.
 

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You should just go through the lease-to-retail at a dealer. Unless you are CPO-ing the car, there isnt much room for funny business and they will add on applicable sales tax at the rate of your garaging address as well as the re-titling of the car.
Does lease-to-retail mean selling a lease return back to the original lessee? If so that has been outlawed by BMWFS for a little while.

Nowadays a lease buyout needs to go through directly with BMWFS, and currently most will get thousands off from contract RV.
 

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Does lease-to-retail mean selling a lease return back to the original lessee? If so that has been outlawed by BMWFS for a little while.

Nowadays a lease buyout needs to go through directly with BMWFS, and currently most will get thousands off from contract RV.
"Lease to retail" was what my dealer called the buyout process, so I may be using the phrase wrong. In my case, my dealer remained the middle man between myself, the DMV, and BMWFS. The price, including the discount you mentioned, all followed the payoff letter. I paid my RV less incentives, plus sales tax, then about another $50-60 in DMV re-titling.

The whole process was just like buying any other car from a dealer, just at a fixed price.
 

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"Lease to retail" was what my dealer called the buyout process, so I may be using the phrase wrong. In my case, my dealer remained the middle man between myself, the DMV, and BMWFS. The price, including the discount you mentioned, all followed the payoff letter. I paid my RV less incentives, plus sales tax, then about another $50-60 in DMV re-titling.

The whole process was just like buying any other car from a dealer, just at a fixed price.
Great info.:thumbup:

So your case matches OP's scenario, i.e. "lease to retail" in CA. Since dealer handled your re-titling, so use tax was collected by dealer too?

Did your dealer collect extra fee for "lease to retail", or BMWFS just said go to this/any dealer and the dealer was obligated to complete "lease to retail" for lessee?
 

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Since dealer handled your re-titling, so use tax was collected by dealer too?
Yep. Sales tax was reflected in the paperwork. In my case, I had it rolled in my monthly payment.

Did your dealer collect extra fee for "lease to retail", or BMWFS just said go to this/any dealer and the dealer was obligated to complete "lease to retail" for lessee?
In CA, the standard dealer doc fee is capped at around $85, which was assessed. In all, I paid around the same DMV and doc fees as any other car purchase.

Doc Fee: $85 (dealer assessed fee)
Emissions Testing: $50 (dealer assessed fee)
E-Filing Fee: $30
Emissions Cert Fee: $8.25
License Fee: $20
Registration/Title Fee: $45
 

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Yep. Sales tax was reflected in the paperwork. In my case, I had it rolled in my monthly payment.



In CA, the standard dealer doc fee is capped at around $85, which was assessed. In all, I paid around the same DMV and doc fees as any other car purchase.

Doc Fee: $85 (dealer assessed fee)
Emissions Testing: $50 (dealer assessed fee)
E-Filing Fee: $30
Emissions Cert Fee: $8.25
License Fee: $20
Registration/Title Fee: $45
So your dealer completed "lease-to-retail" work at no extra cost then, that is good info.

Can your dealer also facilitate transfer to 3rd party within 10 days at no extra cost? CA allows lease end sale for resale within 10 days to avoid double sales tax, but it is unclear if dealers will participate without charging a lot.
 

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So your dealer completed "lease-to-retail" work at no extra cost then, that is good info.

Can your dealer also facilitate transfer to 3rd party within 10 days at no extra cost? CA allows lease end sale for resale within 10 days to avoid double sales tax, but it is unclear if dealers will participate without charging a lot.
I highly doubt it. If anything, they will just treat it as if you traded the car in to them and sold it to the 3rd party. Doesnt hurt to ask though.
 

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I highly doubt it. If anything, they will just treat it as if you traded the car in to them and sold it to the 3rd party. Doesnt hurt to ask though.
Trade-in and sold to 3rd party does not look appealing, as 3rd party buyout (as discussed on Ask-A-Dealer) expects lessee to pay RV minus $6k(e.g.), and then sell to 3rd party for that price without incurring sales tax twice.

If dealer accepts lease buyout as trade in, both lessee and 3rd party will pay sales tax(double taxed), and lessee will likely get trade-in value lower than RV minus $6k (e.g.) from dealer.
 

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Discussion Starter #18
My payoff quote from BMWFS is exactly my RV minus 6k with no added fees whatsoever. The paperwork just mentions that sales tax would have to be paid on my own. There are no processing fees or taxes of any kind. The BMWFS rep I talked to said that if you pay it off through a dealer they will assess fees.
 

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I bought out my 2017 330e - sales tax was added once I went ahead and did the refinancing process through RefiJet (on behalf of BMWFS). They insisted on telling me the sales tax could be 10% even though I am in PA with a 6% tax. Don't know if they thought that would make me feel like I got a better "Deal" when the final number was lower than their original monthly quote.

I did not set foot in a dealer to do this, it was all over the phone with BMWFS and RefiJet. Only additional fees I could tell were for the documents, titling, and the UPS overnight mail of the signed documents once the paperwork was finalized. I had to cover the $14 notary fee on the signature docs. I was under the impression the dealers couldn't sell back your leased car to you as pre-owned; the concept of lease to retail is one I'm not familiar with.
 

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Discussion Starter #20
I guess here's what 'm wondering: I have a registration renewal bill at home. If I payoff the car directly to BMWFS, do I have to re-register the car after BMWFS sends me the title or do I just send in my existing registration renewal with the registration fee? How does the sales tax get paid? Do I have to go to the DMV and pay it?
 
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