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Wait A Second: I Thought Property Taxes On Auto Leases Went Away! Plus: Here's When You Shouldn't Pay A Lawyer For Something You Can Do Yourself And: Sign-Up For Ben's Free Smart Car Seminar Coming Up This Saturday, March 13th
March 11, 2004
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Dear Ben: What can you tell me about property taxes on leased vehicles? Both of mine are leases, and I can’t get a straight answer from the bank or Denton county. We leased one car in 1999 and the other in 2000. I didn’t get hit with taxes on my wife’s car until 2001; I paid it in a panic and was told it would be "a one time deal." I didn't get billed in 2002, but then I got taxed in both 2003 and 2004 on both cars. I’ve been told the state of Texas had created some kind of stipulation for leased vehicles, but I’m confused and as of right now, I’m not paying any taxes!
Andy W., via e-mail
Dear Andy: Texas voters passed Proposition 12 in November 1999, an amendment that was supposed to eliminate the personal property taxes on leased vehicles. Unfortunately, the successful election only empowered lawmakers to change the law and didn’t change the actual law itself. Since then, our pals in Austin passed the actual law and eventually, the (Texas) House and Senate and even Governor Perry even signed off, officially ending the tax...but not the confusion.
According to leasing expert, Ray Stafin Sr. of Addison-based Manufacturers Auto Leasing: "Andy's being billed taxes for the prior year. (Anyone leasing vehicles in 1999 would receive their first tax bill in 2000.) Unfortunately, many banks bill these taxes after the loan has been paid off, since the tax estimate isn’t calculated in the payoff amount. I paid off two leases (in March 2003) and just got the billed (this year) for over $1,200.00. OUCH!
That’s the bad news but here’s good news: Anyone leasing a vehicle after January 1, 2001 may be exempted from these property taxes, as long as they filled out an exemption form. Many "captive" finance companies (like Toyota Motor Credit) already built these taxes into their payments, but the banks (like Bank One) didn’t, which explains why some people got bills and others didn’t. Throw in the fact that some of the banks got confused on which (types of existing lease contracts) to bill and many bills didn’t even go out. The state requires banks to provide them with a list of leased vehicles every year, but the changes in the laws also changed their methods, adding to the confusion. Today leased vehicles must have an exemption form that states the vehicle is primarily for personal use; business/commercial leases must still pay the property taxes."
Dear Ben: I went to a bankruptcy seminar recently. If I pay a certain law firm money, they’ll send letters to the (credit reporting) bureaus to verify information. The non-verifiable information is deleted–therefore–the scores go up. Is it possible for information to get deleted?
KM, via e-mail
Dear KM: Why pay a law firm something that you can do for free? The Fair Credit Reporting Act isn’t tough to understand, especially since I’ve already deciphered what you need to do:www.bendover.com/creditreporthelp.asp.
Dose of Dover For The Week: My first Smart Car Seminar in a couple of years is coming up this Saturday, March 13, 004 in Addison. I’ve scheduled two seminar times (10:00 a.m. and 1:00 .m.), industry experts will be on hand to educate and answer questions on opics including: br>
- Under the hood: When and where (and even more importantly, where not) to service your vehicle and still keep your warranty intact.
- Car buying credit: A constantly changing category–we’ll focus on what the banks look for and what you can do right now to help yourself.
- Leasing versus buying: Why you should lease and when you should buy–and what to do if you’re over (or even way under) your allowed miles.
- Financing 2004: Sorting through those confusing incentive/rebate or 0% interest financing offers, how to save the most dough and even how to drive your way out of a bad current loan/lease balance.
Car appraisers will also be on hand to value your current ride...and for only $10 a credit expert will review (and counsel you one-on-one) your current credit reports. (They’ll obtain a copy and review with you on the spot!) Admission’s free but seating’s limited–register by calling (972) 960-1234 or on-line:www.dfwwheels.com/cartalk.
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