Interstate commerce vehicles

From the 2024 DOR Tax Exemption Study

Home Education Industry Guides Auto Dealers Leases/rental Print Leases/rental Definition The terms "leasing" and "renting" can be used interchangeably and refer to the act of granting another the right of possession to and use of a vehicle for a specified time and, ordinarily, for fixed payments. Industry terminology “Capitalized (Cap) Cost Reduction” (aka Cap Reduction Payment): Is the amount of money (cash) that the lessee pays at the inception of the lease. This payment is in addition to the first lease payment. Generally, sales tax applies on these amounts. Can also include the application of all or a portion of the value of a trade-in. Generally, sales tax would not be due on this amount as the trade-in allowance would apply. “Cap Reduction Tax” is actually the sales tax that is due on cash paid at the lease inception toward the leased vehicle. Series of transactions A lease is not a single transaction or sale, but a contract for a series of transactions. A lease or rental to the consumer is considered a retail sale. Leases or rentals to those who will re-rent or release the vehicle are wholesale sales. Trade-in A vehicle owned by the prospective lessee may be used as a trade-