Question about Sale Tax for a vehicle lease
I want to capitalize Sale Tax in the lease. However, I am not sure how to calculate that. In out State sales tax is due as an up-front tax on the total lease price.
The tax calculation formula is like this:
Sale Tax Due at sign-in = (Sale Price - Rebates - Residual - Trade-in + Interest) * Tax_Rate
If I capitalize this Sale tax, how much would be the added interest on sale tax ? Do I have to pay Tax on this added interest ?
Our state does not charge tax for GAP or Insurance and I know the GAP insurance is included in my lease. However, I don't know how much of the monthly payment is for GAP insurance...
The tax calculation formula is like this:
Sale Tax Due at sign-in = (Sale Price - Rebates - Residual - Trade-in + Interest) * Tax_Rate
If I capitalize this Sale tax, how much would be the added interest on sale tax ? Do I have to pay Tax on this added interest ?
Our state does not charge tax for GAP or Insurance and I know the GAP insurance is included in my lease. However, I don't know how much of the monthly payment is for GAP insurance...
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If GAP insurance is included, it's included. There isn't a separate amount for it, unless you are going with a manufacturer that doesn't include it.
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2015 Subaru Outback 3.6R / 2024 Kia Sportage Hybrid SX Prestige
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2015 Subaru Outback 3.6R / 2024 Kia Sportage Hybrid SX Prestige
Our state charge sale tax on (Selling price + interest - rebate).
1- MF 0.00120, 36 month payments of $276.47 includes total sale tax of $785
2- MF 0.00071, 36 month payments of $346 includes total sale tax of $1897
3- MF 0.00071, 36 month payment of $372 includes total sale tax of $2036
Sale tax rate in here is max 7.875%... to me only #1 make sense. I have no idea how dealers in #2 and #3 calculate sale tax. I am reading these numbers from their printed quote that should be prepared with their everyday lease program.
One more question, what happen if I roll in the sale tax into the cap cost and vehicle gets totaled after a while ? Do I need to continue pay monthly sale tax ?
Pretty clear explanation on that document of what's taxable.
It's basically the sum of the lease payments, plus any upfront amounts, multiplied by the tax rate.
But, it's all due at lease signing. You can pay it, or have it added to your CAP cost. Either way, the state gets their money immediately.
Why your three quotes are wildly different, I can't say.
There is no monthly sales tax. If you total your car, all of the tax has already been paid upfront.
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