Lori M Brown
New Member
- Jurisdiction
- Colorado
who pays property tax for leased cars? I think it should be the car dealer because technically they are the car owners, but why was I asked to pay the annual tax for the leased car?
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who pays property tax for leased cars?
- Thread Starter Lori M Brown
- Start date
army judge
Super Moderator
Have you read your lease agreement?
Do you understand your lease agreement?
You might want to read this:
The Colorado Car Tax – er, "vehicle registration fee" increase – brought to you courtesy of the Colorado Supreme Court | Clear the Bench Colorado
Taxes and Fees | Department of Revenue - Motor Vehicle
Car Leasing Fees Charges and Taxes Explained - by LeaseGuide.com
Car leasing and taxes: Points to ponder | Credit Karma Tax®
Car Tax by State | USA | Manual Car Sales Tax Calculator
adjusterjack
Super Moderator
I'm sure that the property tax law says so.
Tax Counsel
Well-Known Member
Colorado law imposes the tax, which is called the ownership tax (and that's what you see on your annual vehicle registration statement) on the owner of the vehicle.
The DMV offices will not register your vehicle unless the tax is paid. So if you are the one registering the vehicle, the DMV is going to require that you pay the ownership tax and all registration fees or you don't get the registration card and sticker for your vehicle.
Every car lease agreement I've seen from auto dealers and other big auto lessors in the state makes the car lessee (you) responsible for all the annual registration costs, including the ownership tax.
There is a bit of good news for you though. If you itemize your tax deductions then the ownership tax portion of your fees are deductible on your federal income tax return.
Tax Counsel
Well-Known Member
No, not in this case. The Colorado ownership tax for vehicles, while it functions like a property tax, is not part of the property tax title of the Colorado statutes. It is instead part of the title that covers vehicles and traffic. And CRS § 42-3-106(1) clearly imposes the tax on the owner of the car, and not the lessee. Nevertheless, the DMV won't register that vehicle unless the tax is paid, and so if the lessee is the one registering it the DMV will expect the lessee to pay it before handing over (or mailing) the registration card and vehicle sticker. Since most auto lease agreements in the state put the responsibility for paying all the registration fees on the lessee anyway, it works out to be a fairly smooth system where the lessee registers the car each year and pays those fees directly to the state rather than having to involve the lessor.
zddoodah
Well-Known Member
Not sure what you mean by "property tax" as it relates to a car. Is it something that's paid at the time of sale or lease? A component of the annual registration fee? Regardless, the answer depends on the terms of the lease.
Leased vehicles are typically owned by manufacturer or the manufacturer's leasing subsidiary. I've never heard of a situation in which the dealer owns the car.
Asked? If you were truly asked, then the best person to ask why is the person who asked you to do it. That said, if you were truly asked and are not already contractually obligated to pay, then you're free to say no.
Zigner
Well-Known Member
It's the "ownership tax" and it's part of the registration fees that are collected. As pointed out above, the person who pays the registration fees will need to pay this.
Tax Counsel
Well-Known Member
Any kind of property may be subject to a property tax, not just real estate. A number of states impose property taxes on vehicles since that's pretty easy to collect at the time of sale or registration, usually the latter. In Colorado, as I explained earlier, the property tax on cars is called the ownership tax and it is collected as part of annual registration.
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