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Vehicle Lease Tax by State - Lookup Tool with Calculators

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State	Lease Tax Rate	Tools
Alabama	1.5% + county rate + city rate = total	Rate Lookup Lease Calculator
Method: Tax on Payment Pro Tip: Select a city from the rate lookup tool and combine the state, county, and city rates for the total. Car leases in Alabama use "Rental Tax" based on the dealership's address.
Alaska	0% + local	Tax Lookup
Method: Local Lease Tax Pro Tip: The local car lease tax is a flat amount ranging from $10 to $300 added to the first registration. There is no state tax.
Arizona	5.6% + county + city	Rate Lookup Lease Calculator
Method: Tax on Payment Pro Tip: Search location in the rate lookup tool Select "Car/Truck/Vehicle Lease (1 year or more)" Combine the percentages for the total lease tax rate
Arkansas	6.5% state + 1.5% lease tax + local	Rate Lookup
Method: Tax on Payment Pro Tip: Enter garaging address in lookup tool to find combined state, county, and city vehicle lease tax rate.
California	7.25% + local	Rate Lookup Lease Calculator
Method: Tax on Payment Pro Tip: Enter the city or county into the rate lookup tool. The lease tax is based on address of the buyer.

 Purchase Tax   Lease Tax 

Find car lease tax by state and use rate lookup tools and lease calculators to apply tax methods from each location.

The lease tax rate and method of calculating taxable value is different for every state in the USA.

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Tax rates listed here are for car leases only.

For purchases see retail car tax by state.

Car Lease Tax Methods

There are three methods of taxation for vehicle leases:

• Tax on Payment
• Tax on Price
• Tax on Depreciation

The majority of states tax the monthly payment. Some states tax the total of all payments with tax due as a lump sum that can be paid upfront or rolled into the lease.

Maryland, Oklahoma, Oregon, and Texas tax the full sales price listed as the agreed value in the lease contract.

Alaska, Montana, and New Hampshire have no car lease tax. Oregon only charges one-half of one percent.

State	Lease Tax Rate	Tools
Colorado	2.9% + county + city + district = total	Rate Lookup
Method: Tax on Payment Pro Tip: The lookup tool can accept a city name, a zip code, or an entire address. For example, try entering "Denver" or "80203".
Connecticut	6.35% for vehicle $50k or less 7.75% for vehicle over $50,000	Trade Credit
Method: Tax on Payment Pro Tip: CT is one of the nine states that allow full tax credit for trade-in vehicles on car leases.
Delaware	4.25% of price + 1.9914% of payment	Trade Credit
Method: Tax on Price and Payment Pro Tip: Delaware provides full credit for trade-ins.
Florida	6% + local	Rate Lookup Lease Calculator
Method: Tax on Payment Pro Tip: Unlike retail loans, local tax is applied to every lease payment without a maximum. Open form DR-15DSS in the rate lookup tool to verify the local tax rate.

Trade-in Tax Credit on Car Leases

There are three methods of taxation regarding trade-in vehicles on car leases:

• Full Value Tax Credit
• Equity Only Tax Credit
• No Tax Credit

The states that provide full value tax credit for trade-in vehicles on car leases are Connecticut, Delaware, Maryland, Minnesota, New Jersey, Oklahoma, Texas, Vermont, and Wisconsin.

Most states offer a tax credit for trade-in equity only on a car lease, meaning the tax benefit is on the value of the trade minus the bank payoff.

State	Lease Tax Rate	Tools
Georgia	7%	Form MV‑7L
Method: Tax on Depreciation Pro Tip: Georgia has a unique taxation for car leases, written at the bottom of Form MV-7L, based on the amount the vehicle depreciates during the lease term.
Hawaii	4.712%
Method: Tax on Payment Pro Tip: Honolulu, Kauai, Maui, and the Big Island all use the same tax rate for car leases.
Idaho	6%	Tax Guide
Method: Tax on Payment Pro Tip: Factory rebates are omitted from the upfront tax on Idaho car leases.
Illinois	6.25% + local	Rate Lookup
Method: Tax on Total of Payments Pro Tip: Select “Search by Address” in the lookup tool, then enter the garaging location, then find the car lease tax rate under the heading “Vehicle (ST-556 and ST-556-LSE).”
Indiana	7%	Tax Guide
Method: Tax on Payment Pro Tip: Factory rebates and EV rebates are not deductible from the taxed value. Trade equity is deductible from taxation.
Iowa	5% + $10	Worksheet
Method: Tax on Total of Payments Pro Tip: Iowa considers the lease price to be the total of monthly payments plus the upfront payment.
Kansas	6.5% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Leased vehicles in Kansas do not receive a tax credit when traded for another vehicle. Retail vehicles receive a tax benefit when traded.
Kentucky	6%
Method: Tax on Payment
Louisiana	5% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Enter the garaging address into the lookup tool and then scroll to the “Total Sales Tax Rate” that includes the state and local tax combined.

What is CCR Tax on a Vehicle Lease?

CCR stands for Cap Cost Reduction.

CCR tax is charged on upfront payments like cash, factory rebates, and trade equity. This may seem unwarranted, however it has a benefit.

Instead of taxing the entire cost of the vehicle, tax is charged only on the monthly payment for the term of the car lease.

Since upfront payments reduce the monthly payment, these CCR payments are taxed to prevent the possibility of circumventing the tax on the monthly payment.

State	Lease Tax Rate	Tools
Maine	5.5%	Tax Bulletin
Method: Tax on Payment
Maryland	6.5%	Trade Rule Lease Calculator
Method: Tax on Price Pro Tip: Maryland is one of nine states in the USA that allow full tax credit for trade-in vehicles on car leases.
Massachusetts	6.25%	Tax Guide
Method: Tax on Payment Pro Tip: Trade equity is omitted from the upfront tax.
Michigan	6%	Rate Source Lease Calculator
Method: Tax on Payment Pro Tip: View chapter 8, page 2, in the rate source.
Minnesota	6.875% + local	Rate Lookup
Method: Tax on Price + Fees - Residual Pro Tip: In the lookup tool click the “Address” bar, then enter the location to find the combined state and local lease tax rate.
Mississippi	5%
Method: Tax on Payment Pro Tip: Trade equity is omitted from CCR tax.
Missouri	4.225% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Find the lease tax rate by entering the garaging location into the lookup tool and viewing the result labeled “Combined State & Local Sales Rate.”
Montana	0%
Method: No Lease Tax Pro Tip: Montana is 1 of 3 states with no car lease tax.
Nebraska	5.5% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Find the heading “Nebraska Jurisdictions” in the lookup tool, then select the most recent PDF to find the combined state and local lease tax rate by location.
Nevada	6.85% + local	Rate Lookup
Method: Tax on Payment Pro Tip: View the county in lookup tool for the combined lease tax rate. The county for each city is listed below the map.
New Hampshire	0%
Method: No Lease Tax Pro Tip: NH is 1 of 3 states with no car lease tax.
New Jersey	6.625% + luxury tax	Lease Guide Lease Calculator
Method: Tax on Total of Base Payments Pro Tip: Vehicle luxury tax in NJ is 0.4% of the agreed value on vehicles over $44,999.99.
New Mexico	4.875% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Select the current year schedule in the lookup tool, then select the most recent tax chart and find the location for the total rate.
New York	4% + local	Rate Lookup Lease Calculator
Method: Tax on Sum of Payments Pro Tip: The lease tax rate in NYC is 8.875%. The most common rate in all counties of NY State is 8%. Open the lookup tool to find more local rates.
North Carolina	3%
Method: Tax on Payment Pro Tip: Most NC car leases include a $799 dealer document fee.
North Dakota	5%	Tax Guide Tax Worksheet
Method: Tax on Total of Payments Pro Tip: Factory rebates are omitted from taxation on North Dakota car leases.

State	Lease Tax Rate	Tools
Ohio	5.75% + local	Rate Lookup
Method: Tax on Total of Payments Pro Tip: Enter the garaging address into the lookup tool to find the total combined car lease tax by location.
Oklahoma	4.5%
Method: Tax on Price Pro Tip: Oklahoma has two taxes on cars, a 3.25% sales tax plus a 1.25% excise tax. Trade-in credit is given for the sales tax portion, not for the excise tax.
Oregon	0.5% (One-half of 1 percent)	Taxation
Method: Tax on Price Pro Tip: The taxable value is net after rebate in Oregon.
Pennsylvania	9% 10% for Allegheny County 11% for City of Philadelphia	Rate Source
Method: Tax on Payment Pro Tip: Car lease tax is 3% more than car purchase tax in Pennsylvania.
Rhode Island	7%	Trade Rule
Method: Tax on Payment Pro Tip: Trade equity and rebates are omitted from CCR tax.
South Carolina	5% ($500 max)
Method: Tax on Price Pro Tip: SC vehicles priced at $10,000 or more have a $500 flat tax added to the gross cap cost.
South Dakota	4%	Rate Source
Method: Tax on Payment
Tennessee	7% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Verify the local tax rate in the lookup tool. The maximum local tax amount is $88.
Texas	6.25%	Tax Guide Lease Calculator
Method: Tax on Price Pro Tip: Texas subtracts both the trade-in value and the factory rebate from the taxable amount of a car lease.
Utah	4.85% + local	Rate Lookup
Method: Tax on Payment Pro Tip: Find the combined rate PDF in the lookup tool. Omit RR percentages from the total.
Vermont	6%	Tax Worksheet
Method: Tax on Price - Residual Pro Tip: The dealer document fee is included in the taxable cost.
Virginia	4.15%
Method: Tax on Price Pro Tip: Factory rebates reduce the taxable amount.
Washington	6.5% + local + 0.3% motor vehicle lease tax	Rate Lookup
Method: Tax on Payment Pro Tip: Find the combined state and local tax for car leases in the lookup tool by selecting the “Motor Vehicle Sales/Rentals” tab after entering the garaging address.
West Virginia	6%
Method: Tax on Payment Pro Tip: CCR tax includes rebates, and excludes trade equity.
Wisconsin	5% + county	Rate Lookup
Method: Tax on Payment Pro Tip: Enter the location into the lookup tool, then find the “Total Tax Rate” that combines state and local percentages.
Wyoming	4% + county	Rate Lookup
Method: Tax on Payment Pro Tip: Open the most recent rate chart to find the total car lease tax by county.

Vehicle lease tax by state is listed for reference only. Verify lease tax rates and methods directly with the automaker.