Lease tax by state
How is a car lease taxed in Michigan?
Tax is added to each monthly payment. The Michigan state-level rate is 6.00%.
- Method
- Tax on each monthly payment
- State base rate
- 6.00% (excludes local add-ons)
- Down payment taxed?
- Yes — cap-cost reduction is taxed
- As of
- 2026-06-20
What this means for your lease
In plain English: tax is added to each monthly payment. Michigan's state-level lease sales-tax rate is 6.00% (before any local add-on).
Your cap-cost reduction (cash down, trade equity, or rebates applied as a down payment) IS taxed in Michigan, so putting more cash down does not escape the tax.
The detail
6% use tax is applied to each monthly lease payment; the leasing company remits use tax on monthly lease receipts to Treasury. A cap-cost reduction / down payment is treated by Treasury as the first lease payment and is taxed (lessor remits use tax on it, not on the RD-108). See SOS Dealer Manual Chapter 8.
Local add-ons
None — Michigan has no local sales taxes; 6% statewide use tax on lease receipts.
See what this does to your true monthly cost
Michigan's tax method changes the real cost of a lease — sometimes more than the headline payment does. Drop your numbers into the calculator (we preselect Michigan) to fold the tax into one honest, comparable effective monthly figure.
Estimate my Michigan lease cost →Source: michigan.gov · High confidence · Reviewed 2026-06-20. Tax method is researched and cited per state; rates are state-level and exclude local add-ons. This is an estimate — verify with your dealer or the Michigan Department of Revenue before you sign.