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#2958 of 3219 Re: sales tax w/trade-in (new jersey) [riz3]
by kirstie_h HOST
May 31, 2012 (12:07 pm)
I'm not specifically familiar with NJ, so your best bet is to call your local DMV to be sure, but...
In the states I AM familiar with that let you pay sales tax on the difference only, the payoff amount is irrelevant. They just take the new purchase price, subtract whatever the trade-in allowance in is, and you pay tax on that difference. In your case that would be scenario B. The state doesn't care who the trade-in money goes to.
#2959 of 3219 Re: sales tax w/trade-in (new jersey) [riz3]
May 31, 2012 (12:12 pm)
Your first calculation is correct. In NJ, you only pay tax on the difference, regardless of your payoff on the old car.
The only exception is if the old car was a lease. Reason being, on a lease in NJ, you have not paid the sales tax on the leased car (you pay sales tax on each payment).
If they made a mistake on the tax, its not a big deal. They just need to give you the money back.
#2960 of 3219 Re: sales tax w/trade-in (new jersey) [qbrozen]
May 31, 2012 (1:02 pm)
Oh, yes, it was a lease. They treated it as a trade-in for the purchase of the new car though.
I leased the car in California though and moved to NJ about 8 months ago. My payments didnt change after the move, so I would have been paying sales tax in whichever way it was calculated in California.
#2961 of 3219 Re: sales tax w/trade-in (new jersey) [riz3]
by kyfdx HOST
May 31, 2012 (3:24 pm)
No credit for the trade-in against your taxes for a lease, generally.. and, definitely not if you paid your lease taxes in California (which only taxes the monthly payment)..
So, yes... it can be treated as a trade-in, but no... no credit against the sales tax on the new car in NJ..
Sounds like they did it right..
#2962 of 3219 Re: sales tax w/trade-in (new jersey) [riz3]
May 31, 2012 (4:46 pm)
Everyone here is correct, there isnt a tax benefit on a lease. You did pay SOME salestax to California, and maybe NJ, based on each monthly payment which equals the amount of 'car that you used'. The tradein tax benefit is for people that gave the state a lot of sales tax when they bought it, and now get some of it back in essence because they didnt keep the car its entire useful life. In simple terms, you however didnt pay very much sales tax, thus dont really get to use that as an excuse to not pay it this time. Its a USE tax, and used your lease, so that part cant be credited to you.
#2963 of 3219 Re: sales tax w/trade-in (new jersey) [rickhassold]
by kirstie_h HOST
May 31, 2012 (6:36 pm)
Bingo! To everyone who responded. The fact that it was a leased vehicle, instead of a purchased vehicle, makes all the difference in the world. Thanks to everyone who helped solve this consumer's dilemma!
#2964 of 3219 Re: sales tax w/trade-in (new jersey) [kirstie_h]
Jun 02, 2012 (12:21 pm)
Except that nobody took into account the following: how did he trade in a leased car??
OP - did you buy it before trading?
#2965 of 3219 Re: sales tax w/trade-in (new jersey) [robr2]
by kyfdx HOST
Jun 02, 2012 (12:33 pm)
It's easy to trade in a leased car... They all have a payoff amount that the bank is willing to accept, in exchange for the car..
It's no different than if you have a financed car... If the dealer puts a higher trade-in value on it than the payoff, then you have equity...
Some banks won't let you sell your car to an individual, but I've never heard of an instance of where they won't let you trade it to a licensed dealer..
I did it with my first three leases..... though, I've turned in the last four or five...
#2967 of 3219 Are VW GTI's hard to sell?
Jun 14, 2012 (11:22 am)
I just bought a pickup to replace my GTI as a second car thinking because my GTI was low mileage and like new condition I would not have a problem selling it - WRONG! Even though I priced it below the private party price on KBB I never had any calls. I then advertised the truck with the idea of selling either one. I did get several calls on the truck and three showings with one lowball offer. I would rather sell the VW as that was the original idea but was wondering if that model is particularly hard to sell even in top shape. maybe this is just a slow molnth for car buying, but as I menmtioned I am getting interest in the truck. Now I don't know whether to drop the price on the truck below what I paid just to relieve me of the liabilty.