Yes. If you pay sales tax on your car lease, you may be able to take a deduction for it on your federal income taxes. You must choose either sales tax or income taxes to deduct. And you must itemize in order to take the deduction. Either or but not both. Yes you can deduct the capitalized cost reduction tax too.
If your vehicle lease is subject to state sales tax, how much you have to pay and when you must pay it will vary by state.
Some states may charge sales tax on any down payment you make for your car lease. Some might tax the full amount of the vehicle while others may only levy a sales tax on the depreciation you’re paying during the lease term.
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