Leasing in New York is Different
To lease a car in the state of New York means being subject to a different sales tax structure than in most other state.
Most states simply tax any down payment up front and then require that sales tax be applied to each monthly payment. Not so in New York.
How sales tax is applied in New York
In the Empire State, you pay sales tax up front in cash — or roll it into the financed lease, which means you pay finance charges on top of an already hefty sales tax.
Sales tax is computed on the sum of all lease payments at the usual rate in the county. Additionally, sales tax applies to any down payment, the lease acquisition fee, documentation fees, warranty fees, maintenance fees (if charged), transportation and destinations fees, dealer advertising fees, dealer prep fees — literally everything in the lease contract. Furthermore, taxes are charged on any manufacturer rebates, bonuses, or other incentives.
To add insult to injury, NY sales taxes also apply to any lease-end fees, if any, such as a disposition fee, excessive mileage charges, excessive wear-and-tear fees, purchase option fee, and lease transfer fees.
The only fees not subject to tax in NY are those official fees that are already a form of tax, such as DMV tag, registration, and title fees.
New York has never been a particularly lease-friendly state, even beyond its tax laws. Some may remember the outrageous “vicarious liability” laws of several years ago that caused car leasing companies to charge ridiculously high acquisition fees or simply stop leasing in the state altogether. The law has since been overturned, but some lease companies continued to charge high fees. Anyone planning to lease in New York should take extra care to examine fees and taxes being charged by their dealer.