Calculating Taxes

Calculating Taxes

As we explained in the earlier section, calculating your taxes into your payment will vary from state to state. Generally speaking, though, most states only tax the monthly payment using the local sales tax. Be careful to note that you must pay tax on both the Depreciation and the Finance Fee.

How to Calculate a Sales Tax Payment

Sales Tax Rate × (Depreciation Per Month + Finance Fee Per Month)

Let's look at an example:

Factors Results

Depreciation per Month $277.77
Rent Charge (Finance Fee) per Month $100.00
Total Depreciation + Finance Fee $377.77
Local Sales Tax Rate 5%
Tax Rate × (Depreciation + Finance Fee) $25.21
Total Taxes $25.21

Calculating your lease payment sales tax is really not much different than any other purchase you would make.

Back to Calculating Your Monthly Lease Payment