R1S Lease in Texas

[jpd12arch]

I submitted a build for a new 2025 R1S and it’s being delivered in 3 weeks. When I went to fill out the financial portion I was surprised to see that I have to pay taxes up front. Seriously? I have leased my last 4 vehicles and never paid taxes. Is this something new or just Rivian. Regardless if this is the case I won’t be moving forward and I guess I lose my $1,000 deposit. Seems like a deceptive tactic to lure you in only to be blindsided later.
Very disappointed!

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[electruck]

The State of Texas requires the lessor to pay sales tax on the vehicle. Sounds like Rivian is passing that cost along directly to the lessee rather than rolling it into the lease payment (ie, you're not financing the tax amount). You paid the taxes on the last 4 vehicles you leased whether you were aware of it or not (a detail hidden in the lease agreement you probably didn't pay attention to). A leasing company is simply not going to eat the 6.25% Texas sales tax.

https://comptroller.texas.gov/taxes/publications/96-254/leases.php

 

[boosted20v]

Exactly what Electruck said. You've paid taxes they were just rolled into the payment. So either pay up front = lower monthly payment or roll them in = higher monthly payment. Same thing at the end of the day.

 

[jpd12arch]

And then you pay taxes again if you want to purchase the vehicle?

 

[electruck]

And then you pay taxes again if you want to purchase the vehicle?

Yes, read the link I provided. This is explicitly addressed.

 

[mudito]

Yup... Texas... That's the reason why not a lot of people lease around here (unless they're ignorant about the rules and they just overpay). Good thing you caught it before committing to a lease.

 

[jpd12arch]

Guess I’ll be finding something else instead of a Rivian unless I get a friends and family discount to offset the cost. Bummer!

 

[Oyabro]

I leased and located in Texas. It’s a stupid cost but I want the company to succeed. Yeah it’s ridiculous for sure. Seeing what I want to do at the end, but most likely buying it out. For me, it’s about smiles per mile. ?

 

[iansriv]

Guess I’ll be finding something else instead of a Rivian unless I get a friends and family discount to offset the cost. Bummer!

Absolutely your decision to make. The variable appears to be the TX taxes so it would be the same with another manufacturer. You might want to consider discussing this with Rivian, if you already have not, and see if the taxes can be rolled into the lease. All the best.

 

[LL75]

They did have the 6500 F&F discount for 2024 r1t large earlier this year. It is only worth it to offset the tax in texas. Another solution is to have some relatives in states that doesn't have tax on lease

 

[jpd12arch]

Here is another scenario. I have a car I could trade in. This will fetch about $10k less than if I sold it. However my understanding is that the trade would reduce the taxable value on the new lease, correct?

 

[mudito]

Here is another scenario. I have a car I could trade in. This will fetch about $10k less than if I sold it. However my understanding is that the trade would reduce the taxable value on the new lease, correct?

Yes, if part of the same transaction.

 

[electruck]

Correct. However, if you can truly sell for $10k more than the trade-in, you should probably do that as that is significantly more than the sales tax on any R1.

 

[boosted20v]

subtract your trade in value from the total lease price of the Rivian pre tax. Multiply that by 6.25%. The difference would be your tax savings by trading in. If you can sell it outright for more than the difference go that route.

 

[Dave711]

The State of Texas requires the lessor to pay sales tax on the vehicle. Sounds like Rivian is passing that cost along directly to the lessee rather than rolling it into the lease payment (ie, you're not financing the tax amount). You paid the taxes on the last 4 vehicles you leased whether you were aware of it or not (a detail hidden in the lease agreement you probably didn't pay attention to). A leasing company is simply not going to eat the 6.25% Texas sales tax.

https://comptroller.texas.gov/taxes/publications/96-254/leases.php

You could be here in Long Beach and pay 10.25%. Do you still get the $7,500 rebate? The government will always get their taxes.

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