Changes to the luxury motor vehicle tax

Intended audience: Buyers and sellers of motor vehicles.   

Starting July 1, 2026, the following changes apply to the luxury motor vehicle tax: 

• It can be spread over the lease period for leased vehicles. 
• It does not apply to sales of Recreational vehicles (RVs) from July 1 through Dec. 31, 2026. 
• It does not apply to sales to tribal members when the vehicle is delivered to them in their Indian Country. 
• It does not apply to sales to nonresidents.  

How do I report the tax for leased vehicles? 

For leased vehicles, you will calculate the total amount of luxury motor vehicle tax due, then divide by the number of payments. 

Any unpaid tax is due immediately if the lease is terminated early.