I am 24 months into a 27m lease and get a $800 bill for personal property tax. Is this legit?

If everyone has to pay property tax on a leased vehicle then the math on lease vs own changes quite a bit

It should depend on your lease agreement. The leasing company was charged the tax, your lease agreement with them determines whether they then pass it on to you. There is an exemption for personal use that can be filed, but some City's do not accept that exemption (Austin being one I believe, which is where your profile says you are).

Not an expert on this so someone correct me if I'm wrong.

Usually when you sign the lease, the terms state what you are responsible for.

In most states, you only pay taxes on what your lease is worth.

Lets say you leased a BMW 320i sales price is 33,000, and your lease over 27 months totals $10,000 Dollars, then you'd be responsible for sales tax of 6.25% on $10,000, or 625.00.

EXCEPT, in Arkansas, Illinois, Maryland, Oklahoma, Texas and Virginia , where you pay sales tax on the entire value of the car.

In Texas, the sales tax on the lease is due up front. Dr shouldn't be getting a bill 2 years later.

Also, there is no personal property tax in Texas (I believe that he's in the Austin area), just property tax and sales tax. Note, I'm excluding taxes on businesses.

You're right, but I believe this is the business tax assessed to the leasing company that's being passed through to the lessee. The answer to that pass through tax is within the lease contract.

The lease is through my business. And unfortunately there is verbage in the contract that says the tax is mine. I didn't realize there was a property tax on vehicles.

There is a property tax on all vehicles owned or leased by a business.

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There is a property tax on all vehicles owned or leased by a business.

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Thank you. That is what I needed to know. Is this tax usually passed through? I am looking for the most common scenario

It should be directly assessed to you by the county. As well as the rest of your office equipment and furniture value.

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There is a property tax on all vehicles owned or leased by a business.

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Thank you. That is what I needed to know. Is this tax usually passed through? I am looking for the most common scenario

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Ignoring that it's a vehicle the answer here is generally yes for this type of lease. In business there are two types of leases, operating and capital. A capital lease is one where you're going to own the property at the end which generally wouldn't apply to a vehicle so we'll ignore those. Your vehicle lease for a business is effectively an operating lease and in that scenario the lessor is going to pass through the business personal property tax. It's the same as if you leased a computer from Dell on an operating lease. Dell will send you a bill annually for property taxes on what is basically their property.

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It should be directly assessed to you by the county. As well as the rest of your office equipment and furniture value.

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This doesn't apply because he doesn't own the vehicle, the lessor does. When a company leases a vehicle it's an operating lease and companies don't capitalize assets on operating leases.

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It should be directly assessed to you by the county. As well as the rest of your office equipment and furniture value.

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This doesn't apply because he doesn't own the vehicle, the lessor does. When a company leases a vehicle it's an operating lease and companies don't capitalize assets on operating leases.

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Not exactly.

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It should be directly assessed to you by the county. As well as the rest of your office equipment and furniture value.

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This doesn't apply because he doesn't own the vehicle, the lessor does. When a company leases a vehicle it's an operating lease and companies don't capitalize assets on operating leases.

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Not exactly.

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In what way?

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Also, there is no personal property tax in Texas

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There IS personal property tax in Texas. Businesses are charged, usually by the county, on business assets that are personal and not real property. Here personal means non-real estate and not personal as in personal finance.

Careful when throwing around terms you may not be totally familiar with..