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Do I owe tax on my leased vehicle?

Answer #151 -- ( Published 08/09/2005 12:36 PM | Updated 07/12/2017 10:39 AM )

Do I owe tax on my leased vehicle?

Yes. When lessors lease vehicles for a term longer than one year, they owe use tax up front on the selling price of the vehicle. The lessor is the owner of the vehicle and is liable for tax. Most lessors generally reimburse themselves for the tax they paid by increasing the lessee's lease payments. If the lessee chooses to purchase the vehicle at the end of the lease term, the lessee then becomes the owner and must pay tax on the purchase price at that time.

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