Leasing

As of March 5, 2008, the AlternaTax software has been acquired by KPMG LLP. For more information about KPMG and AlternaTax, please visit http://alternatax.kpmg.com. KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com) is the U.S. member firm of KPMG International. KPMG International's member firms have 123,000 professionals, including 7,100 partners, in 145 countries.

State and local tax authorities hold the lessor, not the lessee, liable for collecting and remitting sales taxes, unless the title has been transferred to the lessee. Many companies have experienced the costly implications of not reporting and paying sales taxes properly. The taxation of leases & rentals varies by state, giving three possibile taxing situations:

1) In many states, the renter, or lessor, is considered a reseller and therefore buys the item using a resale certificate but must collect the tax on the rental or lease from the renter or lessee. In these states the lease is a taxable transaction.

2) In some states, leases or rentals are not taxable therefore the lessor will be responsible for paying the tax when they buy the item from the supplier.

3) In certain states, the lessor or renter has a choice.
A) Pay the tax when they buy the item and not charge tax to their customers when it is rented or leased
B) They can buy the item using a resale certificate and charge the tax to their customer on the rental or lease amount.


AlternaDev Tax Compliance solutions for the leasing industry include our licensible tax compliance software AlternaTax, as well as our outsourced service in which we will manage, prepare, print, review, file and send all transactional tax returns to the taxing authorities.