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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
A B C D E F G H I J L M N O P R S T U V W X
L
330.0000 Leases of Tangible Personal Property—In General—Regulation 1660
Annotation 330.1874.200
(a) In General
330.1874.200 Bank Documentation Fees. A bank enters into agreements with various car dealers to lease vehicles to customers obtained by the various car dealers. The dealers secure approval of the potential lessees from the bank and prepare the lease contracts which show the bank as the lessor. The drive-off costs to a customer includes the first month's lease amount, DMV fees, cap reduction, and a $400 bank documentation fee. The vehicles are registered in the name of the bank and the lessees.
The documentation fees are charges required to be paid by the lessees under the term of the leases and are related to the taxable sales (leases) of tangible personal property. Assuming that the fees are remitted to the bank by the dealers (or netted by the bank from the payment for the vehicle to the dealers), the documentation fees should be included in the bank's gross receipts and the rental charges are subject to tax. 7/16/92; 5/20/96.