D Assembly Passes Legislation to Include Leases in Net-of-Trade Tax Treatment

MD Assembly Passes Legislation to Include Leases in Net-of-Trade Tax Treatment

The Maryland General Assembly came through again for vehicle consumers when both Houses last week came to terms and passed legislation that clarifies, once and for all, the absolute applicability of net-of-trade title tax treatment in leased transactions where a trade-in is part of the deal. This measure will ensure that consumers who lease vehicles and put a vehicle they own into the transaction for the trade-in will only have title taxes factored into the lease payment that have been reduced by the value of the trade. Consumers going from one lease to another have no trade- in factor for tax purposes since the lease company, not the consumer, owns the cars.

MADA, with WANADAês support, determined that a –legislative fix” was the way to go on this matter after a lawyer for MVA advised agency staff that leases were not included for purposes of net-of-trade tax treatment, which first became available January 1st of this year. The legislation passed this week also provides that lease customers who were denied net-of-trade tax treatment –be made whole” by the state, which MVA will be sorting out with dealers and lease companies.

More on this positive development as details unfold.