This is my first experience with leasing. My lease was up earlier this year and I did an outright purchase of the vehicle. I have the title assigned to me from Honda leasing and wanted to get a new title in my name. Maybe I am stupid, but I had not idea that I would owe over 1,000 in taxes that have to be paid before I can change this title. I live in PA. Is this normal? Have no sales taxes been paid on this vehicle as yet. The lady at the messanger service, calculated 6% on the total sales price to come up with what we owe.
Is this correct? I was really shocked, thougth I was doing the right thing when I leased now I feel like I am paying for this car for years and years.

Remember that you were leasing the vehicle which means that you did not own it. Because you have decided to purchase the vehicle, you must pay sales tax on the selling price which most likely is the lease balance (e.g., residual value) plus the purchase option fee, if any. Lease and sales transactions are two seperate and distinct transactions. You've now exited the lease and have entered into a sales transaction where you will be liable for the sales tax on the purchase price.

During the term of your lease, PA levied sales tax on your lease payments as well as any capcost reductions at lease inception. When you exercised you're option to purchase, sales tax was levied on the purchase price. You need to check with PA's Department of Revenue or local jurisdiction to determine the correct sales tax rate. However, 6% sounds about right.

I'm almost certain that this same scenario would be played out in all 50 states as I'm not aware of any state that would credit sales tax paid under a lease against the tax on the purchase price should the lessee choose to exercise their purchase option.

To some extent, you're lucky as some states levy sales tax on the Agreed Upon Value (i.e., sell price) in a lease and, then, again on the purchase price if the lessee exercises their purchase option. So, yes, there is a double tax. They get away with it because the lease and purchase are two mutaully exclusive transactions as one has nothing to do with the other.

Hope this helps.