297A.815 MOTOR VEHICLE LEASES.
Subdivision 1. Motor vehicle lease price; payment.
(a) In the case of a lease of a motor
vehicle as provided in section
297A.61, subdivision 4
, paragraph (k), clause (2), the tax is imposed
on the total amount to be paid by the lessee under the lease agreement. The lessor shall collect the
tax in full at the time the lease is executed or, if the tax is included in the lease and the lease is
assigned, the tax is due from the original lessor at the time the lease is assigned. The total amount
to be paid by the lessee under the lease agreement equals the agreed-upon value of the vehicle less
manufacturer's rebates, the stated residual value of the leased vehicle, and the total value allowed
for a vehicle owned by the lessee taken in trade by the lessor, plus the price of any taxable goods
and services included in the lease and the rent charge as provided by Code of Federal Regulations,
title 12, section
, excluding any rent charge related to the capitalization of the tax.
(b) If the total amount paid by the lessee for use of the leased vehicle includes amounts that
are not calculated at the time the lease is executed, the tax is imposed and must be collected by
the lessor at the time the amounts are paid by the lessee. In the case of a lease which by its
terms may be renewed, the sales tax is due and payable on the total amount to be paid during
the initial term of the lease, and then for each subsequent renewal period on the total amount to
be paid during the renewal period.
(c) If a lease is canceled or rescinded on or before 90 days of its execution or if a vehicle is
returned to the manufacturer under section
, the lessor may file a claim for a refund of
the total tax paid minus the amount of tax due for the period the vehicle is used by the lessee.
(d) If a lessee's obligation to make payments on a lease is canceled more than 90 days after
its execution, a credit is allowed against sales tax or motor vehicles sales tax due on a subsequent
lease or purchase of a motor vehicle if that lease or purchase is consummated within 30 days of
the date the prior lease was canceled. The amount of the credit is equal to (1) the sales tax paid
at the inception of the lease, multiplied by (2) the ratio of the number of full months remaining
in the lease at the time of termination compared to the term of the lease used in calculating
sales tax paid at the inception of the lease. The credit or any part of it cannot be assigned or
transferred to another person.
Subd. 2. Lease originating in another state.
When the lease of a motor vehicle as defined in
297A.61, subdivision 4
, paragraph (k), clause (2), originates in another state, the sales tax
under subdivision 1 shall be calculated by the lessor on the total amount that is due under the
lease agreement after the vehicle is required to be registered in Minnesota. If the total amount to
be paid by the lessee under the lease agreement has already been subjected to tax by another state,
a credit for taxes paid in the other state is allowed as provided in section
History: 1Sp2005 c 3 art 5 s 21; 2006 c 259 art 6 s 29