QuestionQUESTION: Hi and thanks so so much for your time.
I need to know what all can be taxed in a lease (excluding monthly payments)
that are paid as up front fees . I live in WA state.
I know I should have paid tax on the down payment (cap cost reduction)
Should I also pay tax on:
- service plan (optional plan for scheduled maintenance)
- Acquisition fee or bank fee
- Doc fee and license fee
I paid tax as required by the dealer on all of the above. I called my state dept
of Revenue and they said they thought that it was correct except that the
doc/licence fee is NOT taxed. What all are legally taxable in up front fees paid
up front on a lease?
Should I contact the dealer and ask for a refund on the taxed doc/lic fee?
What scared me about all ths is that I paid all up front fees and down
payment, PLUS tax on all of it, and I just got an email from the dealer saying
the "computer" did not charge me enough tax and I now owe them another
$500 (its been over a month since I have had my car).
I do not see how this is possible- I paid for all of the above and given the
state revenue office said they shouldnt have taxed me on the doc/lic fee.
advise is very appreciated!
ANSWER: CR,
Thanks for your question. First of all, go by what your State Department of Revenue says, not what the dealership says. Second of all, you signed the lease contract, the dealership signed the lease contract, they agreed and you agreed on the figures, the up front fees, and the taxes. If they messed up, they should eat it, not you. You have a signed contract, the taxes should have already been paid...you will know this if you have your license plates....It is their mistake, and they are just trying to get you to pay for it, to recoup their mistake, and that is not right. If they made the mistake, they need to hone up to it, and honor the original contract. Tell them NO!
Hope this helps.
Thanks - JB
---------- FOLLOW-UP ----------
QUESTION: thank you so very much!
The thing is- i do NOT have my licence plates! I was wondering about that.
My temporary licence expired 4 days ago and I still have not received my
plates in my mail. In addition, I got that email from the dealer stating that the
computer did not charge me enough taxes on my money down (i did pay tax
on money down and all other up front costs) and they need another $500.
AnswerCR,
The fact that your don't have your license plates is not an issue. Once again, YOU and the DEALER signed the documents, contracts, title information, etc. YOU ARE NOT RESPONSIBLE FOR THEIR MISTAKE! They are required to get your plates within the period that your temporary tag expires. In my personal opinion you do not need to pay the dealership anything at all. It is their mistake, not yours. They are responsible for making sure that all the taxes and fees are correct, not you. It is their job, not yours! Call the dealership and tell them that both parties signed the documents, agreed to the figures, and you are not going to pay any extra fees. It is their mistake, and they need to hone up to it, not you. Tell them that you expect your plates and the registration to be completed by the expiration of the temporary tag, and you are not going to be paying any additional fees or taxes. I've been in this business a long time, and I have made this mistake too, but it was "my" mistake, not the customers. Sure, I tried to get the customer to pay for the mistake, but ultimately, I signed a contract, and the customer signed a contract, agreeing to be bound by all of the figures and that does not change. Now, with that being said, they may need you to sign more documents reflecting the correct taxes, but they should take the difference off the sales price of the vehicle, and your payment, interest rate, term, and all the other figures should work out to the exact same, and not one penny more!
I hope this helps. Call the dealership, and let me know what they say, and I can walk you thru any other obstacles that they may try to throw your way.
Thanks - JB
