The LA County sales tax increase on October 1, 2026 (Measure ER) adds half a percent to sales tax countywide. Because California taxes each lease payment as you make it, your tax line rises in October, old lease or new, unless your contract locks in the rate. On a $600 base payment, that is $3 a month.
Quick facts
Every deal on this month's lease specials is quoted with tax excluded, so you can see exactly what your city's October rate adds.
Measure ER, officially the Essential Services Restoration Act, is a new half-percent Los Angeles County sales tax that takes effect October 1, 2026 and expires October 1, 2031.
California sales tax has two layers: a state rate, plus local add-ons called district taxes that counties and cities vote on, capped at 2%. The extra half percent pushes some LA County cities past the cap, so the Legislature passed a special law, AB 1768, signed June 1, 2026.
It raises about $1 billion a year for county health care and other essential services; groceries and prescription drugs are exempt, car leases are not.
The county law ends the tax on October 1, 2031. The California Department of Tax and Fee Administration (CDTFA), the state agency that collects sales tax, has not printed that end date on its rate-change page yet, so the two sources do not match today. A lease running past that date should see its tax line drop 0.5% when the tax expires.
Measure ER adds exactly 0.50% in every city in Los Angeles County, so for most cities the new rate is the old rate plus half a percent.
There is no single "LA County rate"; each of the 88 cities plus the county areas outside any city has its own. These are the ones our customers ask about, from CDTFA Special Notice L-1037.
| Where the car is registered | Through September 30, 2026 | From October 1, 2026 |
|---|---|---|
| Glendale | 10.50% | 11.00% |
| Burbank | 10.50% | 11.00% |
| Pasadena | 10.50% | 11.00% |
| Long Beach, Alhambra | 10.50% | 11.00% |
| City of Los Angeles, and county areas outside any city | 9.75% | 10.25% |
| Torrance, Inglewood | 10.25% | 10.75% |
| Santa Monica, Culver City | 10.75% | 11.25% |
| Lancaster, Palmdale | 11.25% | 11.75% |
| Calabasas, San Marino (new city tax starts the same day) | 9.75% | 11.25% |
The City of Los Angeles has no city tax of its own, so it sits at the county rate. Calabasas, San Marino, Temple City and El Segundo also start city taxes on October 1, so their jump is bigger; check L-1037 for your city.
If your city is not in the table, send it with the model you want through Request a car and we will quote it at the October rate.
Because California does not tax a lease up front; it taxes each monthly payment as you make it, at the rate in effect that day.
The state's rule (CDTFA Regulation 1660) treats a lease as a sale that happens a little bit every month, so each payment gets taxed. That is why an LA lease quote shows tax inside the monthly payment.
It also means the rate is not frozen when you sign. CDTFA's written guidance is clear: on a lease signed before a rate change, payments made before the change get the old rate. Payments made after it get the new rate.
Your payment is not going up. The tax on your payment is.
There is one exception. CDTFA Publication 46 says a lease keeps the old rate only if all four of these are true:
We have not read every lender's contract, so check yours: find the section titled Taxes, usually on page two or three. If it says you pay taxes added during the lease, expect the new rate on your October bill.
That bill comes from the lender, the bank that owns the car during the lease, which collects the tax once the dealer hands it the signed contract.
If you are not sure what your contract's Taxes section means, call or text us at (818) 797-9795 and we will read it with you.
The increase is 0.5% of the taxable part of your monthly payment, which is $3.00 a month on a $600 base payment.
Your base payment is the monthly number before tax, one of the 3 numbers that decide every lease deal. Example, not a quote:
The change is $3.00 in both cities because Measure ER adds the same half percent everywhere; only cities with a new city tax, such as Calabasas, see more. Over 36 remaining payments that is $108.
For your own city and model, send it through Request a car and we will quote it with the October rate.
The bigger number is a lease buyout, when you buy the car at lease end for the price in your contract, called the residual. CDTFA says a buyout is a separate purchase taxed at the rate on the day you buy.
On a $25,000 residual in Glendale, tax is $2,625 at 10.50% and $2,750 at 11.00%, $125 more, and the same $125 in the City of Los Angeles. If you are weeks from buying out, finish before October 1.
You pay the rate for the city where the car is registered, which for most people is home.
CDTFA Publication 44 tells lenders to charge the local rate for the city on your registration card. A Glendale resident who leases from a dealer in Cerritos pays 11.00%. A City of Los Angeles resident who leases from a Glendale dealer pays 10.25%. Where the dealer sits does not matter, which is also why we can shop every dealer in Southern California for you and deliver the car to your door.
The rate follows the car: Publication 46 says a leased car moved out of a district stops owing that district's tax and owes the new one's.
Move from Glendale to the City of Los Angeles and your rate should drop from 11.00% to 10.25%. It does not happen on its own: update your address with the DMV, then tell your lender so it changes the rate on your bill.
Deals change every month and your city's rate does not, so sign up for deal alerts by text and we will send you the specials that fit your address.
If you are buying, signing before October 1 saves 0.5% of the price. If you are signing a new lease, the date changes almost nothing, so shop the deal, not the calendar.
Every deal on our lease specials page is quoted the same way: $3,000 due at signing, tax excluded. We add your home city's rate when we write up the deal, so on October 1 the only line that moves is the tax line. You never need to visit a dealership: we negotiate with the dealers for you, write up the deal, and bring the car to you.
Send us the model you want through Request a car and we will quote it with your city's October rate already applied. The credit application takes a few minutes and gets you approved before you settle on the car.
Whatever you decide about October 1, here is how to move forward with us.
In Los Angeles County in October 2026, the likely reason is Measure ER, which raised local sales tax by 0.5%. Payments on or after October 1, 2026 carry the new rate even on an older lease. If the increase is more than 0.5% of your taxable payment, ask your lender for the breakdown.
Tax is charged on each monthly payment at the rate for the city where the car is registered. It is also charged on your down payment (the contract calls it a capitalized cost reduction) and the lender's acquisition fee. Security deposits and DMV registration fees are not taxed.
On a California lease, it should not be. The dealer taxes what you pay at signing and the lender taxes each monthly payment; nobody taxes the full price of the car. When you lease through us, we go over every line with you before you sign. Ask us to walk you through the tax line before you sign. We show it on every quote, and you never have to sit in a dealership to get it.
Just the buyout price. The monthly payments were taxed as you made them, and the buyout is a separate purchase taxed at the rate in effect that day. From October 1, 2026 that is the new rate, $125 more on a $25,000 residual.
Because California charges the tax to you, the car's user, and the lender only collects it. CDTFA lets a lease keep the old rate only if the contract fixes the price, states the tax rate, bars future increases and cannot be ended at will. If yours says you pay taxes added during the lease, the difference is yours.
Yes. Local sales tax follows the address where the car is registered. Once you register at an LA County address, your payments pick up LA County's local taxes, including Measure ER from October 1, 2026.
Keep reading: the best lease deals in Southern California and how an auto broker in Los Angeles works.
Sources
