Can I deduct the TAVT I paid for a new car purchase (Personal use) from my GA state taxes?

[sebastian-santo7]

Bought a new Tesla in 2023, took delivery in GA state, personal use

[JulieS · Accepted solution]

Yes, you can deduct it as sales tax, but you may not get much benefit from that deduction.

The Georgia TAVT is a one-time tax paid on the value of a vehicle registered in Georgia. Because it isn't an annual tax, it doesn't qualify as Personal Property tax paid on a vehicle.

You can deduct it as sales tax, but you must choose to deduct either sales tax or state income tax, so it's not likely to be more than your state income tax. You can enter the information and see how it comes out.

Here's where to enter it:

1. Open your return.
2. Scroll down to Deductions & Credits. Expand the section by selecting the down arrow. 
3. Select Edit or Pick up where you left off. 
4. Scroll down to Estimates and Other Taxes Paid. Expand the section by selecting the down arrow. 
5. Select Start or Revisit to the right of Sales Tax.
6. Select Continue, then select Easy Guide.
7. Answer the questions about where you lived and the local sales tax rate.
8. Answer Yes on the screen titled Major Purchases.
9. Enter the information about your car and the tax you paid.
10. Answer the next few questions. When you get to We've Chosen a Deduction for You, you will see whether your state sales tax or state income tax is more. You can go with the deduction that TurboTax picked for you or check the box to change your deduction.

Even if your sales tax is more than your state income tax, it may not save you any money. Your total State and Local Taxes are limited to $10,000, no matter how much you‌ actually paid and your total itemized deductions must be more than you standard deduction to reduce your taxes. 
 

[Simpleton]

What if I live in GA and bought the car in another state? 

When I add a major purchase to the Estimated Sales Tax option, it will only gives me an option tp select Georgia as the state of purchase.  

[CesarJ]

You can enter the estimated sales tax paid for the car and select Georgia as the state of purchase. You were a Georgia resident when you purchased the out-of-state vehicle. One thing to keep in mind is that you are also subject to the TAVT for Georgia when you purchase an out-of-state vehicle. 

@Simpleton