Lease tax by state
How is a car lease taxed in Rhode Island?
Tax is added to each monthly payment. The Rhode Island state-level rate is 7%.
- Method
- Tax on each monthly payment
- State base rate
- 7% (excludes local add-ons)
- Down payment taxed?
- Yes — cap-cost reduction is taxed
- As of
- 2026-10-03
What this means for your lease
In plain English: tax is added to each monthly payment. Rhode Island's state-level lease tax rate is 7% (before any local add-on).
Your cap-cost reduction (cash down or rebates applied as a down payment) IS taxed in Rhode Island, so putting more cash down does not escape the tax. Positive equity from a qualifying trade-in is not taxed.
The detail
RI applies its 7% sales/use tax to the gross receipts of the lease, collected on each monthly payment. Cash down payments / cash capitalized cost reductions, acquisition fees, origination fees, and registration/title fees are all included in the taxable base; motor vehicle excise amounts billed under the lease are also taxable. A trade-in allowance on a private passenger car given to the dealer toward the lease of a private passenger car is excluded from the tax base. Governed by 280-RICR-20-70-21.8.
Local add-ons
None — Rhode Island has a single statewide 7% sales/use tax with no local add-ons.
See what this does to your true monthly cost
Rhode Island'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 Rhode Island) to fold the tax into one honest, comparable effective monthly figure.
Estimate my Rhode Island lease cost →Source: tax.ri.gov · High confidence · Reviewed 2026-10-03. 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 Rhode Island Department of Revenue before you sign.
Compare nearby and similar state tax methods
State borders can change how the same advertised lease is taxed. Compare these guides, or browse the complete 50-state and DC directory.