The monthly sales/use tax is assessed as a percentage of the base monthly payment. It is usually determined by the taxing jurisdiction in which the vehicle is located. If you move the vehicle to another state (your lease agreement may restrict your right to do so) or within the same state, the tax rate may change. You have a duty, stated in your lease agreement, to notify the lessor if you move so that the lessor can collect the correct amount of sales/use tax and remit it to the proper taxing authority. Your sales/use tax may change over the term even if you do not move--for example, if the taxing authority changes the sales/use tax rate or for some reason your monthly payment changes. Note: Some taxing jurisdictions require that the sales/use tax be paid at lease inception. In this case, you will have to pay the tax up front unless the lessor permits you to include it in the gross capitalized cost and pay it as part of the monthly stream of payments.