Leases of motor vehicles and other tangible personal property
Windsor Municipal Code Section 4-3-480 - Tax on credit sales. “Whenever tangible personal property is sold … under a conditional sales contract or rental purchase contract, whereby the seller retains title as security for all or part of the purchase price, the total tax, based on the total selling price, shall become immediately due and payable.”

Leases are subject to the same sales taxes as if an outright sale of property has taken place. If the lessor retains title to a vehicle or equipment in the Town, the lessor meets the definition of “engaged in business”, Windsor Municipal Code, Sec. 4-3-30, and the vendor must obtain a Windsor sales tax license, and must collect and remit the Windsor sales tax due.

COLLECTION REQUIREMENT ON LEASES
Leases more than 36 months: When the right to continuous possession or use for more than three (3) years of any article of tangible personal property is granted under a lease contract, sales tax shall be determined based upon a monthly lease payment. The lessor must be licensed with the Town and the lessor shall calculate, collect and report sales tax directly to the Town.

Leases 36 months or less: In the event the lease is less than 36 months – the Town may allow the lessor to opt to collect the sales tax on (1) the entire value of the lease, or (2) each individual lease payment. However, once the vendor establishes how the tax is collected, they are not allowed to deviate from the selected approach.

Location of the “lessor” - The lessor location is a factor in determining how the tax is imposed. If a lessor prepares the lease papers and the lessee obtains tangible personal property from the lessor, then the location of the lessor is used as the lessor’s location. If a leasing or finance company prepares the lease papers, but the tangible personal property is obtained from a store or company other than the location of the leasing company, the location of the store is used as the location of the lessor. If a broker prepares the lease papers, the location of the broker is used as the location of the lessor.

Location of the “lessee” – The lessee location must also be considered. The address where the vehicle is to be garaged should be used as the lessee location. If the vehicle is garaged in Windsor (see the town of Windsor Street/Address Locator found on the website) then Windsor sales tax is applicable.

If the locations of both the lessor and the lessee are in the same jurisdiction, then sales tax is calculated based on the regulations in that local jurisdiction. However, if the locations of the lessor and lessee are in different jurisdictions, the lessor must calculate, collect and remit all applicable city, county, and state sales tax based on the jurisdiction of the lessee.

More...

Show All Answers

1. What is Windsor's sales tax rate?
2. Leases of motor vehicles and other tangible personal property
3. What are the sales tax regulations for a retail business in Windsor?
4. What kind of sales tax license do I need?
5. Are shipping and delivery charges and drop shipping taxable?
6. How do I fix an error on a previously filed tax return?
7. What is required for licensing, reporting final sales tax due and payment of tax due on tangible business assets?