Is Excise Tax on the purchase of a used car in NEW MEXICO deductible on either the State or Federal side? 2nd Q: Annual fee for Car Registration in NM deductible? Thx!
State and local taxes imposed on personal property are deductible if three conditions are met – the tax must be:
based on the value of the property,
imposed on an annual basis, and
imposed on personal property (a car is considered personal property).
Payment for car, truck, or RV registration and licensing or a motor vehicle tax may be deductible as a personal property tax if it is imposed annually and assessed in proportion to the value of the car. New Mexico's excise tax is based on the vehicle's value, but it is not imposed annually. It is not deductible.
Some states refer to their vehicle registration fee as an "excise" tax. If it meets the three conditions above, it would be deductible.
New Mexico's motor vehicle permits and fees registration isn't based on value - therefore, it's also not deductible.