Serves the Commercial Small Fleet Market of 10 – 50 Vehicles

Minnesota Lessors Avoid Accelerated Lease Tax

May 25, 2004

ST. PAUL--Fleet customers in Minnesota will not have to pay taxes at the beginning of a lease, at least not until after the next legislative session, reported the Minnesota Auto Dealers Association. The current session ended without resolving the lease tax issue in the budget. “The governor found a way to fill the $160 million gap in the budget without legislative authority,” Scott Lambert, the executive vice president of the Minnesota Auto Dealers Association, told Business Fleet.The Senate passed an accelerated lease tax proposal earlier in the year. The House of Representatives passed an omnibus tax bill, though it had a provision to exempt vehicles greater than 10,000 pounds from the tax. The accelerated lease tax would require vehicle lessors to collect all taxes up front at the time of the lease agreement signing instead of through payments amortized over the life of the lease. Lease customers that terminate leases early would have been penalized unfairly under this plan, said Lambert. “With the budget problem fixed without us I don’t think we’ll be on the front burner,” said Lambert. “My guess is if it comes back up it’ll be next year.”
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