Sales tax on a car lease, other changes

Ask NJMoneyHelp

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Q. I read your article about new New Jersey sales tax. I recently leased a car. How do I know they charged the new revised sales tax? Also how soon will the estate tax be repealed? Will it be removed completely?
— Taxed enough

A. The same bill that raised the gas tax in New Jersey also imposed other changes, including to the state’s sales and estate taxes.

As of Jan. 1, 2017, the New Jersey sales tax was lowered from 7 percent to 6.875 percent, said Altair Gobo, a certified financial planner with U.S. Financial Services in Fairfield.

A further reduction to 6.625 percent will be take effect Jan. 1, 2018.

Gobo said the individual costs and fees for car leases can be daunting: down payments, security deposits, acquisition fess, disposition fees, title fees, document fees and the good old costs added from dealer add-ons.

Also included in this laundry list will be your New Jersey sales tax, which can be paid upfront or in most cases, it’s simply added to your monthly lease payment, Gobo said.

“The breakdown of this tax is available in your lease contract,” Gobo said. “You simply need to check the math to make sure the proper rate — 6.875 percent — was used.”

As for the New Jersey estate tax, it will be phased out over the next two years.

Before the change, the estate tax was imposed on any estate valued at over $675,000 for individuals, Gobo said.

As of Jan. 1, 2017, the New Jersey exemption amount rose to $2 million per person.

This tax will be completely eliminated for those who die after Jan. 1, 2018.

It’s important to note the inheritance tax hasn’t changed. You can learn more about that here.

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