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Level 3
posted Jan 26, 2022 5:16:31 PM

How do I know the property tax portion of my car registration fees in California? I found how to calculate the VLF at the DMV site, but nothing else.

Information online seems to indicate that the property tax is separate from the VLF and that California charges it, but I was not able to find how to calculate.

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1 Best answer
Level 15
Jan 27, 2022 10:11:25 AM

Under expenses in your Sch C deduct the business percentage of the entire registration fee. 

12 Replies
Level 15
Jan 26, 2022 5:32:37 PM

Look at your DMV registration renewal statement. You will see the deductible amount of the registration fee there. You can only deduct that if you itemize. 

Expert Alumni
Jan 26, 2022 5:40:23 PM

The portion of your California  registration that is deductible is the vehicle license (VLF). Since you found how to calculate the VLF, that is the amount you can deduct on your tax return.

Level 3
Jan 26, 2022 9:16:20 PM

Thank you. Just to clarify, this is for self-employed income deductions, where TurboTax requests first the VLF and then, additionally, the potential property tax portion of the registration fee (as a separate item).

 

I take this to mean that even for self-employed deductions, California does not have a property tax portion of the registration fee?

Level 15
Jan 27, 2022 6:15:48 AM

That’s a different story, since you’re talking about your own small business, as opposed to itemized deductions.  

When you’re self-employed and use your car in your business, you’re allowed to claim the business portion of your state and local personal property taxes on your motor vehicles, as a business expense.

Please see Personal property taxes under Car Expenses in IRS Publication 463, Travel, Gift, and Car Expenses for more information.

Level 3
Jan 27, 2022 9:40:32 AM

Much appreciated. I checked the IRS document and it confirms that the property tax portion can be claimed. Unfortunately I am unable to find how that amount can be calculated, all the information I can find refers to calculating the VLF, nothing about the property tax portion.  

Level 15
Jan 27, 2022 10:11:25 AM

Under expenses in your Sch C deduct the business percentage of the entire registration fee. 

Level 3
Jan 29, 2022 9:20:27 AM

Thank you! I was able to connect with a Turbo Tax advisor. They suggested using the full Registration Fee amount for this field. I take that Turbo Tax calculates the percentage based on the rest of the information about how the vehicle is used.

Level 1
Apr 3, 2022 1:34:05 PM

Doesn't seem like this should be so hard to answer. Property tax is the portion that is based on the worth of the vehicle (as opposed to miscellaneous fees). Your California DMV registration is itemized with the License Fee based on the worth of the vehicle. Seems logical, then, that the property tax portion of your vehicle registration is equal to the license fee, but does not include the weight fee, special plate fee, county/district fees, owner responsibility fee, nor smog abatement fee. This is an assumption and not based on any professional advice or knowledge. 

Expert Alumni
Apr 6, 2022 7:39:13 PM
Returning Member
Mar 27, 2023 2:35:13 PM

The amount that flows to Schedule A line 5c is from the Tax & Int Wks.  That Wks literally calls for "Auto registration fees based on the value of the vehicle." 

 

Let's take the case where there are no fees for weight, owner responsibility or special plate fees …i.e., all zero.  (Judging by their names, these are not dependent on vehicle value per se.)  The remaining line item fees on the DMV invoice that do not change with differing auto vehicles (determined by examining the bills for several vehicles of different value as you may also have) are smog abatement and county tax.  The vehicle registration fee and the vehicle license fees both change value with the particular vehicle - presumably because the vehicle has a different value. On the examples viewed, the vehicles with the most value based on original purchase price and age have the highest registration fee amount and the highest VLF (i.e., vehicle License Fee – “may be an income tax deduction”).  The latter therefore presumably change based on vehicle value and by the qualifying criteria above are prospects for tax deduction.  So, I don't understand why the CA DMV calculates only the vehicle license fee VLF as being deductible when the registration fee changes from vehicle to vehicle and decreases over the years just like the VLF.  The registration fee is therefore not a fixed amount as are the smog abatement (on some vehicles) and county fees.  Anyone understand this?  Could this be bad advice from the DMV??

 

In the case of Schedule C returns with Car & Truck Wks entries, you can deduct both the fixed fees and the value (i.e.'property tax') portions. In the case that your business vehicle mileage is pro-rated for business vs. personal use, that form then allows only the business portion, computes the personal portion and transfers that to the Tax and Int Wks which then combines the personal portion with other tax entries and transfers the total to line 5c of Schedule A.  The personal pro rata share of the fixed fee portion (smog abatement and county district fees) is NOT transferred outside the Car & Truck form for schedule C.

Level 3
Jan 12, 2025 7:13:11 AM

The answer is not clear.  The CA bill has a line item for "Registration Fee" and "License Fee".  Assume the Registration Fee is $200 and the License Fee is $75.  The total bill (ignoring the other adders) is $275.  For Schedule C, when entering in the mileage per vehicle, at the end is a question for the "property tax".  Do I enter in $200, $75, or $275?  These answers in this question have all 3 as possible answers.

Expert Alumni
Jan 23, 2025 10:54:33 AM

It depends.  Registration Fees are deductible however license fees are not. On a Schedule C however, all registration including license fees, may be deductible vehicle expenses. 

 

In your case, you may record $275 if asked this question.