Tax and registration for leasing from an out-of-state dealer

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I live in MI and plan to lease a car from IL. How is the sales tax calculated? I find that dealer calculate the tax based on the selling price. I think in MI, buyers pay tax based on monthly payment and don’t pay sales tax upfront. Any suggestions? Thanks.

You’ll give the dealer your zip and they calculate based on that.

Thanks. I did and that’s why I got confused. I don’t understand why the tax was calculated in IL.

Because it’s an IL dealer and most sales people are clueless on how to calculate a lease payment outside of what their computer says. Doesn’t matter until you are have a contract in front of you, just tell them to calculate the payment without tax (or calculate it yourself based in the inputs). MI lease tax is very straightforward. 6% on CCR, 6% on the monthly that’s it. There’s a calculator on the SOS website for registration fee.

To help a fellow Michigander out: before you leave the state try Traverse City, Ziegler and Sharpe. Out of state but not too far, Toledo and Cleveland have been more competitive than any IL dealer I’ve attempted.

Thank you so much. So even they quoted a wrong number, but when we finalize the contract in person, the system would automatically adjust to the MI tax, is that correct?

I did try to quote around, like Toledo and Cleveland. The best they could do is around 5-7% MSRP pre incentive for an X3. I was almost ready to move forward with a broker until the IL dealer showed up and offered a >10% discount pre incentive. It is not easy to get a good deal in the Midwest :man_facepalming:


F&I will input the correct fees and taxes. That’s their job :slight_smile:

Be patient and take your time. I think that’s doable here even in the current climate. Not at the SE MI dealers, but someone else should take it if you throw the offer out.

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