As you correctly identify in your question, in the State of Washington, the only portion of your vehicle
registration charge that is tax deductible (on Form 1040 Schedule A as an itemized deduction) is the
amount shown on your registration statement for the RTA (Regional Transit Authority)
tax. Only residents of King, Pierce, and Snohomish counties, and who
live within the Sound Transit District, will have an RTA tax. If you do
not pay RTA taxes, then you do not have a tax deductible portion of
vehicle registration fees for Washington vehicles.
However, it is the whole of the RTA tax amount, and not some portion of the RTA tax that is deductible. Thus, you don't need to try and break out or separate in any way the portion of the RTA tax that is underpinned or relies upon the value of the vehicle . . . because the entirety of the RTA tax is calculated based on vehicle value. Perhaps that's the point that TurboTax, and other reference materials, doesn't make explicitly clear.
For more information on the RTA itself, you may visit the following government webpage:
http://www.dol.wa.gov/vehicleregistration/rta.html
Again, though, this deduction is only applicable if your
vehicle registration address is in King, Pierce, or Snohomish counties.
If you live there, and in the Sound Transit District as well, then and only then will you have an RTA tax.
The legal reasoning for deducting the RTA tax is as
follows. The IRS only allows that portion of a state registration fee
that is based on the value of the vehicle to be included toward your
other itemized deductions. Any flat fee portion doesn't count. This
is why there are some 20+ states whose residents can potentially benefit from
the deduction; but the remainder cannot: their states do not charge
vehicle registration fees by value, and instead charge flat fees only. Finally, it is also important to keep in mind that you (or anyone
claiming this deduction) may or may not actually see any net tax benefit from
including these items on your tax return. The reason for this is that you
must have enough itemized deductions (in total) to exceed the standard deduction
available to all taxpayers. Since more than 2 in 3 taxpayers do not, most
people end up taking the (more valuable) standard deduction, rather than
itemizing deductions. If you input all your data carefully, however, the
TurboTax software will make that determination for you.
Thank you for asking this question.
