Lone mountain story

No i think you may be confused about what i was asking. I know there is no sales tax during my 5 year LM lease, nor am i required to pay any sales tax since i do not own the truck yet. But my 5 year lease is coming to a close and i will own the truck outright upon my 60th lease payment. At that time i will get the signed registration from Lone Mountain, and i will officially own the truck. What Lone Mountain appears to be telling me is i then need to pay sales tax on the full purchase price of the truck from 5 years ago in order to register it in my name. Can anyone confirm that? And if so is there any way around that? Another $10K or so in sales tax would not be pleasant. TIA

 

It probably depends on where you live, in NY there is no sales tax on semi trucks or trailers, I couldn't believe it when I titled my first tractor, they tax us to death on everything else.

 

YOU do not pay sales tax on a lease - PERIOD.

It is a lease, you don't own the asset, you are leasing it for a given period of time.

In general there are two types of buy outs - one is what is called a $1 buy out and the other is a variable buy out, either way, the value is not going to be what the full lease costs or the cost of the truck is, it is deprecated and the company took advantage of that depreciation.

When your five year lease is up, you "buy" it and it is transferred to you as an asset with a value (which is derived by what the actual worth of it is).

Some states will tax it at that value as a sale while others will tax you with a USE tax at that value.

HOWEVER ... there is something called a "rolling stock" exemption which means that the state has agreed an asset used for interstate commerce does not have a sales or use tax applied so you pay nothing. I do not have a list of states for that, but many states require you to produce proof that it is used for interstate commerce, most of them requires a lease. THIS is separate from your plates or registration, it is only about the title.

Does this make sense?

 

Lone Mountain owns the truck. They take the depreciation from the truck on their taxes. You take 100% for leasing it.

I've never heard of anyone coming back at the end and saying you owe for sales tax. I mean unless it specifically states that in your agreement. At which time I'd say you've been flim flammed.

Not to mention they advertise their service with no buy out, no strings attached.

 

Here it is from Hannah's mouth. I'd talk to an attorney before I parted with 10 U's, probably get them for a lot more for false advertising.

How It Works | Lone Mountain Truck Leasing

 

Does this make sense?

Yes and no. The latter part of your post does. The first part is very frustrating as I just finished writing I know there is no sales tax in a truck lease, obviously because you don't own the truck.... yet. My lease is a zero balloon, meaning at the 60 month conclusion I do not have to spend a dollar or anything to "buy" the truck. It is mine. I am from Texas and it is almost impossible to call Texas DPS and get an answer on this. LM claims I will need to pay the sales tax on the value of the truck when the lease started 5 years ago in order to get it registered in my name as the new owner. Seems odd since I wasn't the owner 5 years ago. The truck was brand new so 6% or so could be $10 grand. There must be people here who have run into this.

 

If you operate under your or somebody else's authority you are tax exempt, regardless of if it is a lease or sale.

 

I'd say send me the title like you are supposed to, and let me worry about it. If you have the title, that's all the state cares about. All Landstar cares about is your 2290 being current. Let Landstar register it.

Whatever LM you bought it from, you should get the title from that state. Then transfer title to Texas. It doesn't matter if it's registered in Nova Scotia then.

Sounds like they are telling you, you owe for F.E.T.. Like they deferred it. Attorney time.

Please let us know how it turns out.

 

I bought new 2016 Volvo (in December 2015), new 2016 dry van trailer (in March 2016). My insurance runs me right at $650 a month total for truck, trailer & cargo.

 

It makes sense to me, in a way.

You financed, basically buying. There's a tax. Just like a new car loan. Or registering a car for the first time in your name.

Tax SHOULD have been added to the finance already. I think basically what they're saying. Is you'll have to pay the taxes when you license in your state under your name. It would be illogical to think you're buying something without paying any taxes. SOMEONE wants that money. SOME way. SOME how.