# Sales tax on lease in Washington state



## srf32 (Apr 1, 2007)

Hello, I'm a new member and a new resident to the Seattle area. I'm looking to do an ED 335i this fall and am planning to lease.

I've searched the forums as well as http://dor.wa.gov at length with no success. Simply trying to find out if Washington state taxes the full vehicle Cap Cost amount on a lease or just the leased/used amount. Haven't had a chance to visit a dealer or talk to a CA yet. Hoping another WA state resident can clarify - thanks.

Also, just looking to confirm that the "adder" to the current lease Money Factor for ED is 0.0003. I got this number from an earlier post, but it was from Summer 2006. Thanks in advance.


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## emdreiSMG (Dec 10, 2003)

Your tax is that for the county in which you reside (King, of course) multiplied by the base rent (monthly depreciation).


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## srf32 (Apr 1, 2007)

Thanks for the clarification.


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## djlfp (Dec 5, 2004)

emdreiSMG said:


> Your tax is that for the county in which you reside (King, of course) multiplied by the base rent (monthly depreciation).


Wow! No tax on the interest portion of the lease payment?


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## emdreiSMG (Dec 10, 2003)

djlfp said:


> Wow! No tax on the interest portion of the lease payment?


I don't have my paperwork from the lease of my '95 540 6speed, which is the last car that I leased in Washington state. I went and re-checked my paperwork from my current ('05 M3) lease in Calif. and have discovered that I DO pay tax on both base rent and interest in my (present day)California lease.

Assuming Washington and Calif. are the same, just calculate the following for your lease #

MSRP + add ons - negotiated discount = CAPitalized Cost

Cap Cost - Residual Value(calculated from % of MSRP) = Depreciation Over Term(base rent)

Base Rent / Lease term (months) = Monthly Depreciation

MONEY Factor X (Depreciation over lease Term + Cap cost)=Lease Interest Per month

SO LEASE MONTHLY PAYMENT =Lease Interest + Monthly Depreciation X your sales tax.


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## Greg220 (Mar 31, 2005)

Does anybody know why the sales tax is 9.2% for cars in WA but 8.8% for everything else?


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## beewang (Dec 18, 2001)

Sales/Use Tax is set by the taxing authority of its own jurisdiction.


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## Joe2002330i (Nov 13, 2006)

From whom are you ordering? 
Did you get a discount off of ED MSRP, or are you paying full list?
Who is your salesman?


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## cvb (May 10, 2006)

There is an additional .03% rate for new car purchses here...so an 8.8% rate is 9.1%...that's one more factor of why a lease works out better than financing...you don't pay the full tax on a $60k car, just the portion you use...combine that with ED pricing, MSDs and lease royalty rebates, it's the best deal if you drive under 15k miles and year and plan to keep your car about 6 years or less (please let's not start a thread on the benefits of buying over leasing though...there are too many of these).

If you haven't tried BMW Northwest yet, I highly recommend you call Ron Hansen...he's been awesome helping with my ED and was referred to me from another Bimmerfest member. It's a bit of a drive from Seattle, but totally worth it for me.


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