Oh, the tax is correct, all right. I certainly had to pay it. Your lease deal is probably set up like mine as $9,499.99 due at signing. That includes several major components:
- The registration fee is a sort of tax itself, so it is not taxable.
- The first monthly payment is taxable, but already includes its own tax.
- The tax itself is not taxable.
But most of the rest of that $9.5K is capital reduction, so is taxable. They jiggle the figures so the tax is correct for the cap reduction but the total comes out $9.5K. Then at the bottom they show how you are going to pay the $9.5K. $7,500 is a "non cash credit" and you have to come up with the other $2K.
Look, one way or another the state needs to get its tax on the full $34K or whatever price of the car. If you bought it you would pay tax up front on the whole thing. Since you are leasing you are paying the tax in installments. But the $7,500 has taken a big whack out of what you owe (that's what cap reduction means), so the state demands its share.