To buy or lease a car has become a viable choice for consumers. Outright purchasing a new vehicle could mean a hefty up-front rebate. Leasing might offer the buyer a lower finance rate, plus the option of trading sooner for another vehicle.
However, leasing a car is not just about signing loan papers and driving off the lot. If you think so, ask Ron Mayo who leased a 2007 FJ Cruiser this year and was socked with a business property tax on an exempt, personal, not-for-business use automobile.
Until he received a business property tax charge in the amount of $565.52 on his USB Leasing LT statement, Mayo said he didn't even know where the county's tax appraisal office was located.
“This is the third vehicle I've leased,” he said, “and there has never been a question.”
The personal tax on his newly leased vehicle was a surprise, but soon turned to frustration when it appeared there was no way to correct the mistake.
“The leasing company had already paid the county the amount due by the time I received the monthly statement,” he said. “Then, the bill was passed on to me.”
In trying to clear up the mistake, he called Jerry Lee, chief appraiser for the county, who was never available to explain the event. Anita Christie, business personal property appraiser, told Mayo since a lessee's affidavit was not signed on purchase, a copy of his IRS tax Form 1040 would be required before the status of the vehicle could be determined.
Mayo said he believed this is in violation of the 4th amendment and his right to privacy because he could find nothing in the state code to demand he divulge his confidential records under any circumstances.
“I have never been in business for myself, and the exempt papers I signed when the vehicle was purchased were legally binding in the case of submitting a false statement,” he said.
When the problem could not be solved locally, Mayo called the State Comptroller's office and informed a technical department representative the county's tax assessor office would not accept the state provided forms for exempting the vehicle. He was instructed to contact Lee once again. He did and Christie related the same information. Mayo asked why the 1040 had to be used and Christie said, “because he said so.”
No legal reason was cited.
Mayo said he called County Attorney Carey Fraser, who said he couldn't recall ever advising the county tax assessor to enforce the tax.
Dennis Hart, of the state property tax division, talked to Mayo. Hart said that this is highly unusual and doesn't know why it's being done.
“Mr. Hart told me that it will continue until it goes through the court system,” Mayo said. “He said that no one in Austin is requiring him to do this.”
A.C. Cooper, finance manager for Toyota of Fort Worth, stated the Comptroller of Public Accounts' Form 50-285, lessee's affidavit, is included in all financial leasing packages. The form, with other paperwork, is forwarded to Toyota's finance company, USB Leasing LT in Wisconsin. Cooper said the document is then forwarded to the state concerned.
According to Sec. 9.419 of the Comptroller's procedures for determining property tax exemption for motor vehicles leased for personal use, the chief appraiser, in lieu of Form 50-285 to validate the exemption, can use a signed and notarized statement.
Mayo said the exempt status for his vehicle has finally been changed. But it was only after he ultimately gave in and furnished the appraisal district a copy of his IRS Form 1040, which had no Schedule C attached.
“I really had no choice,” he said. “I was being told that I would have to pay thousands of dollars if I didn't relent. So, I did.”
Chief Appraiser Jerry Lee said he had no comment on the incident.
In the meantime, a letter has been forwarded from the appraisal district to USB Leasing indicating Mayo's vehicle has been removed from the tax roll for the 2007 tax year. He said USB Leasing told him the personal business tax amount would be removed from his statement with no late charges as soon as a refund was received from ECAD.
“It could be a while,” Mayo said. “One thing I know is I will never lease another car.”
SHERRY BOARDMAN is a staff writer for the Empire-Tribune and can be reached at firstname.lastname@example.org or 254-965-3124, ext. 229.