Deductions & credits

Yes. You can deduct an annual fee as a sales tax deduction. Iowa says "That 5% fee is only deductible on the IA 1040, Schedule A, line 4b if the taxpayer claimed an itemized deduction for general sales taxes paid on the federal form 1040, Schedule A, line 5a."

Here's how to do it:

1. Type sales tax in Search in the top right
2. Select Jump to sales tax
3. On Let's Compare Your Sales Tax and Income Tax tap Try Sales Tax Deduction Anyway
4. Tap EasyGuide on How do you want to enter your sales tax info?
5. Fill out the screens. Say Yes on Major Purchases
6. On Enter Major Purchases, enter your vehicle info and 5% fee

See Deduction.