How is a car lease taxed in Delaware?

What this means for your lease

In plain English: tax is added to each monthly payment. Delaware's state-level lease tax rate is 1.9914% (before any local add-on).

LeaseWorth's estimate taxes your cap-cost reduction (cash down, trade equity, or rebates applied as a down payment) in Delaware, so, in the estimate, putting more cash down does not escape the tax. That is LeaseWorth's reading of the law, not a published rule that names a cap-cost reduction.

The detail

Delaware has no general sales tax, but 30 Del. C. 4302(b) imposes a use tax on every motor vehicle lessee equal to 1.9914% of the rent under the lease. The lessor collects it from the lessee when collecting each rent payment (30 Del. C. 4303(a)). Division of Revenue guidance for lessors says all amounts received under rental agreements are subject to the use tax, so LeaseWorth treats a cap-cost reduction paid to the lessor as taxable. The same guidance counts trade-ins as consideration for the lessor's separate gross receipts tax, but no official source says whether trade-in equity applied to a lease counts as rent for the use tax, so LeaseWorth also treats it as taxable; ask the leasing company how it handles a trade-in.

Local add-ons

No local sales tax. Not included in the rate: Delaware's one-time DMV document fee on a leased vehicle, 5.25% of the sale price or current NADA trade-in value, whichever is higher (raised from 4.25% on October 1, 2025). The lessor pays it as the titled owner and typically passes it to the lessee or capitalizes it; on a typical lease it is larger than the 1.9914% use tax.