First, you can deduct the sales tax if you are in a state where you deduct sales taxes instead of state income taxes. The IRS has a general method for deducting the sales tax where you don’t have to keep track of all your tax for the year. The IRS assigns you an allowable sales tax deduction based on your local tax rate and your income. You can add the sales tax you paid for a vehicle to that standard amount. However, if you would rather deduct your state income taxes because they are larger than your sales tax, you can’t include the vehicle sales tax.
Second, in some states, the vehicle registration fee includes a personal property tax based on the value of the vehicle. This personal property tax amount deductible whether you deduct sales tax or income tax. There is a separate question for personal property taxes and vehicle registration fees. However, the entire vehicle registration fee is usually not deductible, only the portion of the fee that is based on the value of the vehicle. Other fees, such as a general registration fee, license plate fee, or inspection, are not deductible.
