Do I need to pay Sale tax and Use tax for my leased Car in CT ?

Question

I was in CT last year and moved to OH. As soon as I moved my car leasing company ( GMAC ) increased my monthey payment by $20 as Sales Tax. Now I got a letter from them that I have to pay used tax and wanted to send them $250 . I dont live in CT anymore ..

I leased my car from IL and I think they took tax when I leased it . Not sure these sales tax and use tax in CT . Your help is really appriciated

Thanks

Prince J

Answer 1

Every state sales & use tax is slightly different but they all have a common theme:  you have to pay sales tax, but if you don't pay sales tax then you have to pay use tax.

You never have to pay both sales tax and use tax on the same transaction.

This I know from working many years in corporate state & local tax compliance.

Most likely, the GMAC lease will specify that they can collect from you whatever sales/use/property tax they have to pay.  It's a standard thing for these big car leasing companies.

Thing is, if GMAC paid more tax than was due, they can get a refund from CT.  But nothing in your lease contract prevents them from collecting it from you.

I learned this when GE Auto Leasing billed me for property taxes on a lease a few years ago.  I disputed it and we went back & forth for a while.  Ended up paying because I needed my credit report cleared to refi the house.

So, GMAC might not be exactly the same as my situation, but I'd bet $10 it is.

Sorry that probably doesn't help you decide what to do.  $250 isn't worth a lawyer unless you're in one of those pre-paid legal plans.

Answer 2

You will have to call the leasing company and ask them.  None of us have any clue what was in your lease agreement.