Calculator · Lease tax by state
California car lease tax
Tax is charged on each monthly payment as it is billed, so it is spread across the term rather than owed at signing.
Rate
7.250%
before local surtax
Paid
Monthly
spread over the term
Cost rank
8 of 10
cheapest first
How California calculates it
Reg. 1660: tax is measured by the rentals payable and collected as rentals are paid. A capitalized cost reduction is part of fair rental value and is taxed at inception (CDTFA annotations 330.0000; Pub. 34). District taxes stack on the 7.25% statewide base and are frequently 1-3 points.
Source: California primary guidance · reviewed 2026-08-23
Still unresolved. manufacturer rebate treatment not yet confirmed against a primary source; currently modeled as non-taxable. Everything above is sourced; this specific point is not, and is flagged rather than guessed at.
Worked example
A $45,000 vehicle negotiated to $41,500, leased for 36 months at 60% residual and a 0.00185 money factor, with $2,000 down and a $895 acquisition fee.
Adjusted capitalized cost$40,395.00
Residual value$27,000.00
Monthly depreciation$372.08
Monthly rent charge$124.68
Payment before tax$496.76
Tax added to each payment$36.02
Monthly payment$532.78
Tax collected at signing$145.00
Due at signing$2,677.78
Total tax over the lease$1,441.55
True cost per month$592.36
What's in the taxable base
Manufacturer rebatesNot taxed
Trade-inReduces the base via lower payments
Cash down paymentTaxed at signing
Local surtaxYes — varies by locality
California against the other states
| State | Due at signing | Total tax | True cost/mo |
|---|---|---|---|
| New York | $3,292.10 | $795.34 | $574.41 |
| Florida | $2,526.57 | $1,073.01 | $582.13 |
| Georgia | $3,574.41 | $1,077.65 | $582.25 |
| Ohio | $3,640.07 | $1,143.30 | $584.08 |
| Illinois | $3,739.48 | $1,242.72 | $586.84 |
| Washington | $2,531.54 | $1,251.85 | $587.09 |
| New Jersey | $3,814.05 | $1,317.28 | $588.91 |
| California | $2,677.78 | $1,441.55 | $592.36 |
| Pennsylvania | $2,541.47 | $1,609.52 | $597.03 |
| Texas | $5,090.51 | $2,593.75 | $624.37 |