In Texas, all property is considered taxable, unless it is exempt by state or federal law. Does that mean you have to pay property tax on a leased vehicle?
Leased Vehicles for Personal Use
Leased vehicles produce income for the leasing company and are in turn, taxable to the leasing company. In many leasing contracts, companies require their lessees to reimburse them for taxes assessed on the vehicles.
Are There Any Exemptions?
Texas does exempt leased vehicles that are not held for the primary purpose of income production by the lessee.
These vehicles include passenger cars or trucks with a shipping weight of not more than 9,000 pounds and leased for personal use. Personal use would mean using the vehicle more than 50 percent of its use (based on mileage) for activities that do not involve the production of income.
How Do I Qualify?
To qualify for the exemption, you must timely file an affidavit with the leasing company. You may print the Lessee’s Affidavit of Primarily Non-Income Producing Vehicle Use form or get it from your particular leasing company.
To receive the exemption, the leasing company must file a Lessor’s Application for Personal Use Lease Automobile Exemptions application with the county appraisal district where the property is located before April 30 of each year.
The exemption application should contain all vehicles that are used primarily for personal use. If the leasing company does not file the application timely, the vehicle is not exempt for that year.
Make sure to follow up with your leasing company to check if everything is proceeding for that year correctly!
ENROLL TODAY In the Property Tax Protection Program™
Your property taxes will be aggressively appealed every year by the #1 property tax firm in the country. If your taxes are not reduced you PAY NOTHING, and a portion of the tax savings is the only fee you pay when your taxes are reduced! Many FREE benefits come with enrollment.