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New Member
posted Mar 15, 2022 4:39:18 PM

Can i deduct sales tax on a vehicle that i bought in another state?

i9 live in nevada and bought a car in california

0 3 1317
3 Replies
Expert Alumni
Mar 15, 2022 4:58:12 PM

Yes, you can deduct the Sales Tax paid to California, but your deduction is limited to the general rate tax at your residence in Nevada.  

 

From IRS Schedule A Instructions:

Sales taxes on motor vehicles are deductible as a general sales tax even if the tax rate was different than the general sales tax rate. However, if you paid sales tax on a motor vehicle at a rate higher than the general sales tax, you can deduct only the amount of the tax that you would have paid at the general sales tax rate on that vehicle. Include any state and local general sales taxes paid for a leased motor vehicle.

New Member
Jan 15, 2024 4:14:17 PM

Yes, I am aware that "deduction is limited to the general rate tax at your residence in Nevada", The general sales tax rate is 8.27% where I live and paid ~ 8% in CA. But in NV, the sales tax for CARS is just 3.67%, so I thought that I could only enter 3.67% * price of the car (before taxes). That didn't work. I tried all sorts of variations and keep getting the Turbo error "You cannot deduct sales tax paid on this item since the rate was different than the total general rate for this location, 8.27%."

 

Bottom line: I KNOW THAT! But #1, for a car the rate is not 8.27%; it's 3.67%. #2, if I enter 8.27% of price before taxes, I get the same error.

 

So - - I think I know what I should do, but Turbo Tax won't allow me.

 

How do you think I should COMPUTE the number to enter? 3.67% times selling price? 8.27%? Something else?

 

And in response to another reply, yes, I realize that itemizing is less fruitful than it was before 2018. That having been said, I enter the info and let Turbo total and then compare to standard deduction.

Expert Alumni
Jan 16, 2024 3:36:08 PM

It depends on your navigational steps. Try this if you haven't done this.

 

  1. log into Turbo tax
  2. Go to deductions and credits>estimates and other taxes paid
  3. Sales tax
  4. Select the easy guide
  5. When you arrive there, the first screen will have you pick a location and then the sales tax rate in your area.  If in Reno, its 8.25%.
  6. Once you record the information., select done.
  7. Next screen will ask if you made any major purchases. Here you enter the sales tax information for the car. I have included a screenshot showing the screen you should enter the information..
  8. Note, the sales tax rate for vehicles in 2023 was 4.6%. Also, if the screen doesn't appear, you may need to delete your original entries and start over again.

@Mary Cecelia