Missouri personal property tax on auto lease

[pat]

I am currently scheduled to turn in my 2000 BMW Z3 in December 2002 and I am thinking about leasing a New 2002 Audi TT. In Missouri, The owner of a motor vehicle on January 1 of each year is subject to pay the personal propoerty tax on the vehicle for the entire year. Accordingly, I will be subject to pay the personal property tax on the Z3 when the tax is due in December.

If I lease the new Audi TT, Can I be certain that the leasing company won't be subject to this property tax in 2002 and pass this cost to me for payment? I'd hate to get the double whammy!

[Starr Winmill]

Thanks for your question.

I would be cautious about leasing a new vehicle in 2002. I have heard that in some states if you are the registered lessee for just 1 day in the year, you can be assessed personal property tax for the entire year.

To verify how Missouri would handle that situation, you might want to call the DMV and find out. If they assess the tax in this way, your leasing company will have no veto power with the state. They would simply pass it on to you.

Let us know what you find out, if you have time.

-Starr Winmill
Forum Moderator

[pat]

According to the local county personal property tax department, this tax is only applicable to property "owned" on January 1st of each year. Since the leasing company did not own the vehicle on 1/1/2002, no personal property tax would be assessed this year.

Now here is a nice loop hole in Missouri: If anyone is in the position to terminate an existing lease or sell their car at the end of the year and wait several days until January 2 to purchase or lease a new vehicle, you will avoid an entire year of personal property tax. For example, If I dropped of my existing lease on 12/29/02 and leased my new vehicle on 1/2/03, the leasing company would not be subject to pay personal propoery tax until 2004, which is billed in arrears in December 2004.