How to Figure Taxes on a Lease Car in New Jersey

Figuring taxes on a lease car deal in New Jersey is an easy process as the state only requires taxes to be calculated relative to your monthly payment. Calculating taxes using this method means that you must only pay tax on the vehicle's depreciation, not the full selling price. This can save you thousands of dollars in tax over the term of the lease. Take note that most advertised car leases do not include sales tax, so you will need to use this calculation to approximate the actual monthly payment of an advertised lease.

Instructions

1

Determine the base monthly payment. The base monthly payment is the amount advertised by car manufacturers and auto dealerships, and is also the price you are likely quoted when contacting the dealership via the Internet. Remember that this base monthly payment may include a large down payment or capitalized cost reduction, so you may need to contact the dealership to get a more specific quote for a vehicle that fits your needs and budget. The residual values and money factors used to calculate lease payments change on a monthly basis.

2

Calculate the monthly sales tax. Sales tax is charged monthly as a percentage of the base payment. Therefore, if you make a large down payment or have positive equity in a vehicle you trade in, your monthly payment will be lower as well as your sales tax. To calculate the monthly sales tax, multiply the base monthly payment by 7 percent. This calculation will yield the monthly sales tax.

3

Add the figures together. To see the true impact of the base monthly payment on the sales tax, add the two figures together. This is your total monthly payment due to the leasing company each month.