Are vehicle personal property taxes deductible in Virginia?

[shervd]

I live in Virginia and receive an annual personal property tax bill for my vehicle based on its value (about $900 per year).  However, on the TurboTax list, it states that these fees are not deductible in Virginia.  Why are these not deductible expenses?

[Texas Roger · Accepted solution]

You may be confusing vehicle registration fees and property taxes. Vehicle registration fees are not deductible in Virginia on your federal tax return but personal property taxes based on the value of the vehicle should be.

[shervd]

Thanks for your response.  I understand the difference between reg and PPT but Turbotax makes it confusing because there is no section to enter personal property taxes on vehicles, only for planes and boats.  In the vehicle registration section it says "enter the deductible portion of your vehicle registration fees".... Is this were I enter the personal property tax fee on my car? Another confusing factor is that in the Turbotax help section, my state (VA) is not listed as one that charges taxes based on vehicle value.  Which is absolutely not true! Thanks again.

[Texas Roger]

Even though TurboTax does not include vehicles in the list of personal property deductions, entering it there puts it on line 7 of Schedule A which is where it should be. So I would go ahead and enter it as a personal property tax deduction.

Regarding deductibility of the vehicle registration fee, according to information on dmv.org/va, the Virginia registration fee is based on the vehicle weight, the type of plate, and the length of time you choose to register the vehicle. For the fee to be deductible on the federal tax return, it must be based on the value of the vehicle.

[shervd]

Thank you

[kballvt]

I live in Montgomery County, Virginia. I called the County Treasurer. They told me that personal property taxes on vehicles are assessed by value, and that they use NADA tables. My tax bill from the county lists 4 different "Assessed Values" for my 4 vehicles. They match the NADA tables. The amount due is different as well. The assessed value goes down every year. The weight of my vehicles does not. There is even a high mileage allowance that decreases the assessed value. Clearly property taxes (at least in Montgomery County) are based on vehicle value, and should be deductible in federal tax returns. TurboTax is wrong. TaxSlayer seems to allow this deduction.

[Texas Roger]

The distinction in the answer above is between vehicle registration fees and personal property taxes. TurboTax only addresses vehicle registration fees not personal property taxes for vehicles.

[kballvt]

Yes, but if you enter personal property tax for vehicles, TurboTax only uses for State deduction and not federal. It specifically says to enter vehicle taxes under "Car Registration Fees" if based on value. But, if you do that and are a Virginia filer, it denies the entry on Sch A. TurboTax does not handle this properly.

[Texas Roger]

I see what you are saying and agree that TurboTax does not handle it properly. Even though TurboTax says not to, I would enter the taxes under the heading Personal Property Taxes in the Cars and Other Things You Own section. This will enter it on Schedule A.

[DCinDC]

I'm looking at my vehicle paperwork right now. At the top, the large heading text reads:

City of Alexandria, Virginia

2022 Personal Property Tax Bill

Due October 5, 2022

I also found this associated with Loudoun County, Virginia: "Virginia is a personal property tax state where owners of vehicles and leased vehicles are subject to an annual tax based on the value of the vehicle on January 1." 

I don't know why TurboTax never seems to acknowledge that we Virginians do, in fact, pay personal property taxes on our vehicles. Every single year I have to enter the taxes paid on my family's vehicles in the "boats and planes" section for deductibles. Why can't TurboTax fix this? I'm sure they hear from at least a few Virginians regarding this anomaly ever year. 

[AnnetteB6]

You are entering it in the correct sections since it is a 'personal property tax' and not a vehicle registration fee.  

The TurboTax help content does recognize that Virginia imposes a personal property tax and directs users to enter it in the personal property tax section.  

No matter which section is used to enter the taxes paid, it is all reported in the same section of Schedule A Itemized Deductions.

@DCinDC 

[LarryW54]

No there is no confusion PPTax should be deductable in Virginia (NOthing to do with Registration.
We should be able to put that in or at least make an override. Now what line items do we do that on.
Answer the question and don't make assumptions

[DCinDC]

I don't have TT open right now, but a Virginia resident needs to enter the PP tax as such in the "planes and boats" section of deductibles. I've done this for many years and it has worked fine. Above, you see a TT representative acknowledging that's the correct place to enter it. 

[DaveF1006]

It depends if you itemize or not.  Personal Property Taxes are deductible on your federal and VA state returns if you choose to itemize your deductions if over the standard deduction amount.. 

You are correct in stating this does not have anything to do with registration and is reported separately. Here is how this is reported.

1. With your return opened, go to federal.
2. Deductions and Credits
3. Cars and other Things you Own
4. Personal Property Taxes

You can deduct state and local taxes that you pay for your personal property. Personal property is all property except real property (such as your home, vacation home, and rental property). The taxes must be assessed annually and must be based on the value of personal property you own. Examples of personal property that are often taxed include vehicles, boats, recreational vehicles, airplanes, and mobile homes.

As I mentioned, the state of Virginia conforms with federal guidelines.  if you are able to itemize your deductions on your federal return, you may itemize on your Virginia State return. No exceptions!! Here is a screenshot where this entry is to be made in your federal return.

@LarryW54 

[BeenThereDoneThat17]

Feb 21, 2025:  I agree with DaveF1006 and also with those that noted in past years of TurboTax's apparent confusion that Virginia does have both a car tax and a registration fee which is unnecessarily confusing those of us that like to just answer simple questions and move on.  For my records, I would prefer to enter the car registration fee portion from my county's "Personal Property Tax Statement" on that line and have TurboTax determine that it won't apply to Federal tax because it's based on weight since I'm in Virginia; but DON'T DO THAT b/c TurboTax assumes the amount entered there is based on the value, so leave that line blank.  I then usually enter the Personal Property Tax amounts where I open a TurboTax worksheet to list all my vehicles and use description line to list my vehicle names along with the equation 'Tax amount' - 'Car Tax Relief', then in the amount column, I manually calculate the actual amount paid.  I close the little worksheet and TurboTax adds them up to fill in the line.

Unfortunately, for my 2024 taxes, TurboTax presently has a bug that came up where I can't get to the personal property tax entry, even after a) deleting & reloading TurboTax with their support and b) starting over with a new file (yes, from the beginning).  TurboTax support officially recorded it as a bug after my call yesterday.  Supposed to hear back in a few days from TurboTax and who knows if/when a fix will be released.  I also found someone else reported the same bug 6 days ago in the community topics, to which I also added a comment.  See below for the "bug" window that pops up saying you're screwed.   Sure, I could also add the car tax to the 1040 form directly, but I'm unsure what happens with my override if the bug fix is released.

Fortunately, the average person like me will take the Federal Standard Deduction and the amount for this tax won't be used, but it most assuredly wrecks havoc with my record keeping!  It also reduces credibility of the software.   In lieu of a bug fix, I'll be adding my actual value based car tax to the 'Registration fee' line to get the tax to the Schedule A form for my records, as others noted, TurboTax just adds them all up and puts them on Schedule A, line 5c.