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Jayhawk Fan
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Does the lease payoff amount include taxes? I wanted to ask BMWFS this question, but they are inconveniently closed on weekends (why ANY service business doesn't have customer service on weekends drives me nuts!). So I have my payoff amount, just want to know if I've got to come up with other jack for the taxes. Thanks
 

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I'll check the DMV. I'm buying out the lease early and since on a lease you pay taxes as you go, just figured that to end the lease, you'll have to pony up the tax on the pay off portion.
 

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beware_phog said:
I'll check the DMV. I'm buying out the lease early and since on a lease you pay taxes as you go, just figured that to end the lease, you'll have to pony up the tax on the pay off portion.
You are right, here in CA we pay it at the DMV. When I've purchased vehicles for cash (from a dealer) the tax is added at time of purchase, not a separate thing like it is when u buy from a private party.

I just got my payoff docs yesterday, but I talked to a person. As I recall the 800 number has an automated system that allows you to request those documents and you may be able to have them faxed to you instead of mailed. They come with all the informatiion you need to know to close out the transaction.
 

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beware_phog said:
Does the lease payoff amount include taxes? I wanted to ask BMWFS this question, but they are inconveniently closed on weekends (why ANY service business doesn't have customer service on weekends drives me nuts!). So I have my payoff amount, just want to know if I've got to come up with other jack for the taxes. Thanks
If you buy your car directly from BMW FS, you're payoff will include taxes. It will be your residual plus tax. If you turn it in to the dealer and have it CPO'd, they'll charge you tax also.
 

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Incorrect. At least in California.

If you buy out your lease from BMWFS it will be the depreciated pay off value at that point in time. When you go to your state motor vehicles department to retitle the car, which you are obligated to do and should want to anyway, you will then have to pay sales tax on that amount (assuming you are in a state with sales tax). In fact the paperwork you will receive from BMWFS will indicate that no sales tax was collected as part of the payoff (which might imply that for other states they might collect it).

adrian's bmw said:
If you buy your car directly from BMW FS, you're payoff will include taxes. It will be your residual plus tax. If you turn it in to the dealer and have it CPO'd, they'll charge you tax also.
 

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5 Rakete said:
Incorrect. At least in California.

If you buy out your lease from BMWFS it will be the depreciated pay off value at that point in time. When you go to your state motor vehicles department to retitle the car, which you are obligated to do and should want to anyway, you will then have to pay sales tax on that amount (assuming you are in a state with sales tax). In fact the paperwork you will receive from BMWFS will indicate that no sales tax was collected as part of the payoff (which might imply that for other states they might collect it).
That's weird. Just for my curiosity, I'll call BMW FS Monday to confirm. My colleague bought his 2003 540i lease for the payoff and BMW FS added sales tax to his payoff. Of course, that's in Georgia.

Is this what BMW FS did on your lease in CA?

Tax laws definitely differ from state to state regarding lease to purchase transactions. Thus, it's always best to check with BMW FS.
 

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adrian's bmw said:
That's weird. Just for my curiosity, I'll call BMW FS Monday to confirm. My colleague bought his 2003 540i lease for the payoff and BMW FS added sales tax to his payoff. Of course, that's in Georgia.

Is this what BMW FS did on your lease in CA?

Tax laws definitely differ from state to state regarding lease to purchase transactions. Thus, it's always best to check with BMW FS.
Its the same on my lease. Payoff does not include sales tax and I am responsible for it when I re-register the car. However, if I refinance the car thru BMWFS, they collect sales tax.
 

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Yep, when I bought out my '02 M Coupe I paid BMWFS the payoff and then when I went to the DMV I had to pay the sales tax. If the paperwork I had received indicated the sales tax had already been collected I imagine that would have been that. The DMV person did ask if sales tax had been collected as I recall but I'm sure I would have had to produce documentation if that had been the case. As it was the BMWFS paperwork indicated otherwise.

I assume that BMWFS is consistent but perhaps on a state by state basis.

adrian's bmw said:
That's weird. Just for my curiosity, I'll call BMW FS Monday to confirm. My colleague bought his 2003 540i lease for the payoff and BMW FS added sales tax to his payoff. Of course, that's in Georgia.

Is this what BMW FS did on your lease in CA?

Tax laws definitely differ from state to state regarding lease to purchase transactions. Thus, it's always best to check with BMW FS.
 

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arnolds said:
Its the same on my lease. Payoff does not include sales tax and I am responsible for it when I re-register the car. However, if I refinance the car thru BMWFS, they collect sales tax.
That's true for sure. I knew that BMW FS collected sales tax at some point.

Indeed, the tax laws differ from state to state because in GA, they definitely collect sales tax no matter what. I guess they don't trust us paying taxes on our own like they do in CA. :cry:
 

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adrian's bmw said:
That's true for sure. I knew that BMW FS collected sales tax at some point.

Indeed, the tax laws differ from state to state because in GA, they definitely collect sales tax no matter what. I guess they don't trust us paying taxes on our own like they do in CA. :cry:
Adrian, your payoff rules vary state to state, and company to company.

In RI, BMWFS does not charge sales tax on the payoff. You are required to apply for a new title within 21 days (the leased car is originally titled only to BMWFS), and at that time you pay sales tax on the payoff amount.

Given that, you'd probably understand my confusion when I called Mercedes-Benz Credit to make a payoff a few weeks ago, and they instructed me that in RI, they do collect sales tax. They have two different payoffs-- a dealer payoff that excludes tax, and an account payoff that includes tax.

Moral of the story: when you get a payoff from your bank, always specifically ask them if it includes taxes or not. Even if there is a "norm" in your state, some people are always going to do it differently.
 

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SARAFIL said:
Moral of the story: when you get a payoff from your bank, always specifically ask them if it includes taxes or not. Even if there is a "norm" in your state, some people are always going to do it differently.
Which reminds me... a dealer payoff can be different than a customer payoff that might include sales tax. :eeps:
 

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Discussion Starter #13
adrian's bmw said:
Which reminds me... a dealer payoff can be different than a customer payoff that might include sales tax. :eeps:
Wow. I thought I was asking a straightforward question. Should now better whenever the word TAX comes to it, there is nothing straightforward about it.

I'll call tomorrow and get the skinny for the great state of Florida.
 

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Discussion Starter #14
beware_phog said:
Wow. I thought I was asking a straightforward question. Should now better whenever the word TAX comes to it, there is nothing straightforward about it.

I'll call tomorrow and get the skinny for the great state of Florida.
Payoff in FL does not include taxes. Once you register the car, then you pay taxes.
 
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