Buying a Tesla in Texas, and Business Tax Benefits

[superraz375]

I am looking forward to purchasing a fully loaded P85 Tesla Model S in the coming month. I am very excited about the ability to deduct the cost of the Model S from my taxes. I have a question though. After talking to some of the representives at Tesla, it seems that the "Leasing" option is not available in Texas and therefore I wont be able to get any tax benefits from purchasing the car...

Is this true? And is there a way around this?

Thank you very much!!

 

[cwerdna]

am very excited about the ability to deduct the cost of the Model S from my taxes.

Uhh.... I doubt this has anything to do w/EVs or Teslas or even their financing/"leasing", specifically. Are you going to be using your Model S for business?

Are you currently deducting the cost of a car for business?

 

[superraz375]

Yes I am as I am currently doing a business lease. However, the tesla representative said that the tesla leasing program isn't technically a "lease". Therefore I think I am going to lose the benefits of a business lease

 

[ModelS8794]

Yes I am as I am currently doing a business lease. However, the tesla representative said that the tesla leasing program isn't technically a "lease". Therefore I think I am going to lose the benefits of a business lease

Speak to a CPA for certainty. Your tax advantages are different for a purchase vs a lease, but you have opportunities for tax savings in both situations, and you may find the EV credits make a purchase a better bargain than a lease after all.

 

[LagunaDallas]

Yes I am as I am currently doing a business lease. However, the tesla representative said that the tesla leasing program isn't technically a "lease". Therefore I think I am going to lose the benefits of a business lease

I'm self-employed and in the same boat, and as far as I know, the business tax benefit will be far less writing this off using the standard business deduction method vs. actual expenses like I've done with my past leases. I would have loved a lease program from the start, but the car was so compelling to me that I was willing to give up that tax benefit difference in order to put a Model S in my garage. I cannot begin to express how incredible this car is and how irrelevant the tax situation has become after 2 1/2 months of ownership. It's phenomenal.

 

[Ven Rala]

I am in the same boat. I am expecting my Model S in about 4-6 weeks (hopefully) and am looking into both financing and leasing through my business. However all the private leasing companies are not forwarding the federal tax credit to the leasee. Supposedly because they can't guarantee they themselves will get the credit. I am not sure I believe this reasoning. I also found out even with financing, the business tax credit is only $2500, not $7500 as it is for personal vehicles. So this is taking a lot of number crunching to figure out if the tax deductions are worth losing the tax credit.

if anyone knows of a leasing company that is willing to give the federal tax credit, I'd love to hear about it.

 

[reddy]

I am looking forward to purchasing a fully loaded P85 Tesla Model S in the coming month. I am very excited about the ability to deduct the cost of the Model S from my taxes. I have a question though. After talking to some of the representives at Tesla, it seems that the "Leasing" option is not available in Texas and therefore I wont be able to get any tax benefits from purchasing the car...

Is this true? And is there a way around this?

Thank you very much!!

Texas is a bizarre state when it comes to auto leasing. You essentially pay sales tax twice on a large portion of a Texas auto lease. Texas collects the full sales price sales tax from the 'owner' of the car (i.e. the leasing company) and then you also pay sales tax on the lease payments as well. On an economic basis it is usually better to buy the car yourself, take the depreciation on the car , and when you sell it write off the difference as a loss.

 

[superraz375]

Texas is a bizarre state when it comes to auto leasing. You essentially pay sales tax twice on a large portion of a Texas auto lease. Texas collects the full sales price sales tax from the 'owner' of the car (i.e. the leasing company) and then you also pay sales tax on the lease payments as well. On an economic basis it is usually better to buy the car yourself, take the depreciation on the car , and when you sell it write off the difference as a loss.

Thank you for the help! I am going to find a CPA and ask him how I should go about purchasing the Tesla and which methods will cost me the least.