J.P. Morgan Chase Is Sued Over Tax on Auto Leases

A lawsuit accuses J.P. Morgan Chase & Co. of improperly collecting sales tax from Californians when their auto leases run out, an allegation that surfaced in February in suits against Bank of America Corp. and Wells Fargo & Co.

Like the previous actions, the suit against New York-based Chase seeks certification as a class action, pursuing damages for all affected leaseholders in California. It was filed Friday in Los Angeles County Superior Court.

California requires leasing firms to charge state and local sales tax on regular lease payments, but not on fees charged when the leases are terminated, the suit contends. The banks collected taxes on these so-called disposition fees ranging from $250 to $450, said Andrew Selesnick of Encino, one of the attorneys who filed the action.

In the Chase case, Lynn R. Mason of San Diego had sales tax of $23.25, or 7.75%, added to his $300 disposition fee when he turned in his leased Audi last December, according to the suit.

Chase executives declined to comment, saying the bank hadn’t been served with the suit. Wells Fargo and Bank of America previously declined to comment.