Tax on NYS Lease is driving me nuts

[08-335ci]

I am calculating a lease for a 2011 BMW 335is coupe:

MSRP: $60,275
Cap Cost: $55,000 (I am paying $500 over invoice but there is a cash back of $1,495)
MF: .00135
Residual: 60%

I calculate the lease payment without tax at: $646.27
I calculate the tax as: $2,006.66
I calculate the lease payment with tax as: $704.72

The dealer caclulates the lease payment with tax as: $710.24

He calculates the capitalized taxes at $2,197 (which is why the higher payment). He says that if I pay the taxes up front, he gets the same numbers I do.

Am I wrong or is he?

[08-335ci]

OK, Never mind. I figured it out. NYS charges Tax on the Tax when you roll it into the lease.