Car Lease Taxes and Fees in Texas

1. **Motor Vehicle Sales and Use Tax**: When you lease a vehicle in Texas, the total amount that the lease is worth (the sum of all your lease payments over the lease term) is subject to the Motor Vehicle Sales and Use Tax. As of my last update, this tax rate is 6.25% of the vehicle’s sale price or the total amount of the lease payments, whichever is less. Essentially, you’re taxed on the value of the car you’re using during your lease term.

2. **Local Sales and Use Tax**: In addition to the state tax, local cities or counties might impose their own sales and use tax on leased vehicles. This can vary depending on the local jurisdiction.

3. **Upfront Payment**: Unlike some states where tax is applied only to each monthly lease payment, in Texas, the tax is calculated on the total of all the lease payments and is typically due upfront at the beginning of the lease. However, some leasing companies might roll this tax amount into the monthly payments.

4. **Other Fees**: As with most vehicle transactions, there could be other fees to consider such as registration, title, or inspection fees.

Always check with the Texas Comptroller’s office or consult with a local tax professional for the most current information and to get a clear understanding of how these taxes and fees apply to your specific lease agreement.