Hello, i am looking looking to lease for the first time. And i have checked some local places and out of state places and on the estimates all show a large tax amount based off the sale price. I do not live in Chicago(cook county) and its my understanding that with the new law that went into effect Jan 2025 that you only pay taxes on a down payment and monthly rate. I was checking the signed deals section and it does seem like most of them had a blank tax section. I found another post that seem to explain it, but it had a bunch of crazy equations. Can anyone eli5, do i have to pay taxes if i do a 0 down or 0 drive off?
Why would this scenario eliminate sales tax? You still will pay sales tax on the monthly payment. IL requires sales tax to be paid upfront, but most banks will let you roll that into the monthly payment (they pay tax to the state on your behalf).
If you want to use the LH calculator, the closest way to estimate IL sales tax is to use the “Total Lease Payment” box and then check “New York State”. You can then check the “zero upfront” box or “capitalize taxes” box for $0 drive off or $0 down. Your sales tax will be either 8% of 8.25% (if you buy from a dealer in Cook County).
Also, some dealer worksheets will show a total purchase price section and a lease payment section. The total purchase price section is generally a “cash” price, so the sales tax are based on the total purchase price. The lease section will still calculate taxes based on the lease payments.
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Thank you for the response and the tip with the calculator, i will give that a go. And sorry i misspoke i meant the sales tax as if i were purchasing the vehicle. Like the tax on the total msrp.