How does sales tax work on a car lease?

It varies by state. Many states tax each monthly lease payment, while some tax the full vehicle price or the total of payments upfront, and some also tax down payments or rebates. A few states have no sales tax at all. That means the same lease can cost noticeably different amounts in different places. Check your state's revenue department or DMV, and ask the dealer to show how tax is calculated on your lease.