The NC vehicle property tax is deductible as a personal property tax, on the federal return.
The highway use tax is NOT deductible as a personal property tax. However, the highway use tax is deductible as a sales tax.
BUT
You are allowed to deduct state & local income taxes OR sales tax; but not both. This provision was added primarily to allow a deduction for people in states without income tax. Sometimes, with a big purchase (like a car), you may be better off deducting sales tax even if your state has an income tax. Enter both, under deductions, and TurboTax will calculate the best option. If you don't have all your receipts (and hardly anybody does), you are allowed to use tables (built into TT from IRS Pub 600) based on income & exemptions, You can then add major purchase sales tax (highway use tax) to the table amounts. Neither is deductible if you use the standard deduction instead of itemizing.
