Hi I learned a lot from this site and could not get my lease quote from the dealer to match the lease calculator here. Come to find out that in NJ there is a 4% luxury tax on the Net Cap of the vehicle if over $45K MSRP.
That turns out to be a pretty significant number.
Here’s how I think it is calculated, hopefully someone knows for sure. I’m just not 100% sure how it’s calculated in a lease. So if MSRP is $50,000 and your negotiated sale price is $40,000 for your Net Cap lease value - there is a $1,600 additional luxury tax. If it’s a 39 month lease, do I take that $1,600 and divide by 39 payments? So essentially an additional $41 per month on my lease payment. That’s more than the 7% sales tax on the monthly payment (how NJ does it).
Do I understand that correctly? I would think the Luxury tax would be just on the depreciated value but looks like it’s the who thing - even the residual that I’m not technically “using”.
I almost leased a 2015 RX350 in December, and there was none of that mentioned. The tax you are talking about doesn’t exist AFAIK. The numbers I got from the dealership matched what I put in the calculator here. I googled it, however, and found that it is .4% and the dealer pays it. Thus, it does not impact you.
I remember this line item from a lease a few years ago. It was $220-ish (0.4% of the selling price listed on the lease) and not a dealbreaker when that was the only item that didn’t exactly match my own calculations vs the dealership’s.
@BoardwalkNJ, it would be inaccurate to say “it does not impact you.” Maybe the sales price on your RX350’s paperwork was below the $45K threshold? Or maybe you didn’t notice the line item? Either way, an NJ dealer would certainly have collected it on a car requiring it. Dealerships are not in the business of paying a retail end-user’s tax out of their own pocket and foregoing to collect it.
4% of the sale price of $45K is a lot more that $220. Based on my lease I’m working on it’s $49 / month - or $1,778 over 39 months… That’s why I think I may be calculating it wrong or not understanding. I’m amazed not to find posts all over the internet about NJ Luxury tax on cars. I’m trying to put down 5 MSD’s to get the MF down to .0001 which saves me about $1,500 over 39 months then the luxury tax puts it back and them some plus the out of pocket cash for the MSD’s.
The fact that the dealer is responsible for paying the tax is interesting - why wouldn’t they collect it during registration? Regardless, I found a dealer in CT that has the car and will do my lease deal and I’m guessing isn’t aware of the NJ luxury tax so we’ll see how that goes.
Wow I totally missed that! thank you. And the dealer in NJ was telling me it was 4% and that was why their payment was $40 more than the offer I have in New York. Scammers!
