@yaquina
Unfortunately, it appears that Missouri (see below) does not have a consistent state-wide application of property tax applied that is deductible.
The MO Dept. of Revenue page: https://dor.mo.gov/motorv/fees.php#regisfees
Note that Missouri's fees on motor vehicle registration are not based on value but instead are based on HP motor horsepower and on weight. See the IRS requirement that follows.
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RULES FOR DEDUCTIBILITY OF PROPERTY TAXES PAID RELATED TO PERSONAL USE OF MOTOR VEHICLES
- IRS requires that the tax be applied on the property = that is the vehicle, on an annual basis and not at any other time such as when the vehicle is bought. Must be assessed by the state or municipality or county annually!
- IRS requires that the allowable deductible property tax be calculated "ad valorem" to use the IRS term for meaning it must be taxed on the fair market value of the car, which will decline usually over time.
Some states make it easy and clearly identify if an annually assessed personal property tax, whether labelled as personal property or excise tax, is deductible for Federal Income Tax purposes and others .... well other states simply don't!
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Separate from Property Tax is the question of whether you really want to talk about the sales tax when you purchased the car!
TWO DIFFERENT TOPICS: Annual PROPERTY ("EXCISE") TAX & SALES TAX
Scroll below for discussion on Sales Tax Deduction
For Motor Vehicle Excise Tax - a/k/a Property Tax in most cases:
THE IRS allows as a deduction on Schedule A Itemized Deductions "Other Taxes" Line 8 those taxes that are assessed on the value of property [so called "ad valorem"]. Some states have a registration fee that has no tax included in it; some states have a fee with both fixed components and variable components. Of these states with variable registration fees, either assessed in one bill or assessed in several bills, IF one of the fees is based on the value of the vehicle and assessed annually, that specific portion of the registration fee, frequently called either a "property tax" or an "excise tax" is deductible. It varies from state to state and in some state even within county.
IRS INFO: https://www.irs.gov/uac/Car-Sales-and-Excise-Tax-Deduction:-Questions-and-Answers
- The fee is an ad valorem tax. Ad valorem tax is a fee based on a percentage of the car's value.
- The fee is imposed on an annual basis.
- The fee is imposed on personal property.
- In those states where this is applicable, you may be able to deduct as an itemized deduction the personal property tax.
*****You need to look at the registration fees on the bill that you paid to know.****
The "personal property tax" which may be assessed by the state, county or municipality imposing a fee which is based on the value of your vehicle - this is critical that it be a tax known as "ad valorem" - on value- Some such taxes are commonly called "excise tax." Registration fees may, state depending, incorporate such a tax. If you have such a value-based tax it is filed as Itemized Deductions Taxes - Personal Property Tax. Moreover, the tax, excise or whatever it is called, must be assessed annually to be deductible.
See below if you live in a state where some or all of the "Excise Tax" or "Property Tax" or a portion of the registration fees are deductible under Personal Property Tax
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See below for a discussion of sales taxes imposed on motor vehicle sales
There are typically two different taxes involved in buying and registering a motor vehicle.
If you are talking about the Sales Tax assessed by the state where you live or register the vehicle, see General Sales Tax below. If otherwise, and you are asking about taxes or fees built-in to the registration process which are not specifically a General Sales Tax, see Property Tax / Excise Tax below.
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Updated as of 1/29/2019
As states change their taxation, the list has changed over time. PLEASE LEAVE A COMMENT IF YOU HAVE AN ADDITION OR A COMMENT!
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==>>> How to report Property Tax imposed on your personal use motor vehicle [note: personal use; and assuming the tax qualifies, see below]
- Go to Personal Deductions and Credits - select "I'll Explore on my own!" - see the lengthy list of Deductions & Credits
- Scroll down to "Cars and other Things You Own" and select "Car Registration Fees"
- You must have knowledge of the amount of assessed fees and taxes that are in fact qualified [see below!] The popup list of states is incorrect as well as out of date relative to deductiblity of Property Tax.
- Enter Make of Vehicle, Model, and even suggest you enter year; then amount of actual deductible property tax.
Read below to understand what is meant by a qualifying deductible property tax on your vehicle. Registration fees in and of themselves are not. The rules are spelled out below.
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REGISTRATION FEES [per se - in and of themselves] are never deductible for a personal use vehicle
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You need to look at the registration fees on the bill that you paid to know.
The "personal property tax" which may be assessed by the state, county or municipality imposing a fee which is based on the value of your vehicle - this is critical that it be a tax known as "ad valorem" - on value- Some such taxes are commonly called "excise tax." Registration fees may, state depending, incorporate such a tax. If you have such a value-based tax it is filed as Itemized Deductions Taxes - Personal Property Tax. Moreover, the tax, excise or whatever it is called, must be assessed annually, and uniformly to all individuals holding such property, to be deductible.
See below if you live in a state where some or all of the "Excise Tax" or "Property Tax" or a portion of the registration fees are deductible under Personal Property Tax.
I've tried to list each state where I have found definitive information on if or if not your vehicle registration fees have a deductible component. If only the state name is listed, I believe the entire annually assessed property tax is deductible.
- Alabama
- Arizona
- California
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Colorado - see note - it seems it does not meet IRS requirements
http://larimer.org/vehiclelicensing/estimate.htm Registration fees include a license fee based on the weight of the vehicle and an ownership tax based on the age and taxable value of the vehicle. Ownership tax is calculated using the taxable value of the vehicle for the registration period. Taxable value is calculated with a percentage of the manufacturer's suggested retail price. The percentage used on passenger vehicles is 85% and on cargo type vehicles 75%. Once the taxable value is established it remains on the ownership documents for the life of the vehicle.
- Connecticut
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Georgia **NO* not since 2013 see below!
Vehicles purchased on or after March 1, 2013 and titled in this state will be exempt from sales and use tax and the annual ad valorem tax. Instead, these vehicles will be subject to a new, one-time title ad valorem tax that is based on the value of the vehicle. The new Title Ad valorem Tax (TAVT) is not deductible as personal property tax for Federal or Georgia purposes. In order to be deductible as a personal property tax, it must be imposed on an annual basis.
- Indiana
-
Iowa - does not meet IRS requirements
Registration fees based on both weight and age, not Federal Deductible but deductible on IOWA schedule A
https://tax.iowa.gov/expanded-instructions/deduction-0#VRFD scroll down to "Vehicle Registration Fee Deduction"
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Kansas - perhaps - see note as to county tax
Dependent on each county example: Sedgwick Cty. - If county assesses an annual personal property tax based on value, then that portion of registration fees are deductible. It appears that a part of the fee is indeed a locally assessed property tax at the county level and varying by county, so you either have to look at the bill that you paid or contact the county treasurer of the county where you paid the bill.
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Kentucky - Partially deductible, see below
Usage Tax:
Reg. Fee:
Title Fee: ( state fee and clerk fee)
Total paid at registration
If you look on your car registration, usage tax is listed first, then registration fee, then title fee, then ad valorem tax. The usage tax is sales tax and cannot be deducted. Ad valorem tax is property tax and CAN be deducted. The registration, title and clerk's fees cannot be deducted. If it was a new car, the ad valorem tax may have been paid by the dealer or previous owner for the year and may not be listed on your fees, so you wouldn't have any to deduct on taxes for the year. The next time you register the car, you will pay ad valorem tax (in KY it is a yearly fee paid at the time of registration) and you can deduct it for that year.
I'm not sure anyone has addressed the issue of deducting KY's Vehicle Usage Tax, at least not with specificity. The IRS allows taxpayers to choose whether they will deduct the State Income Tax they paid or the State Sales Tax they paid. If one chooses to deduct Sales Tax, they can deduct the actual amount paid (lots of record keeping), or they can use a table. On top of that, they can deduct Sales Tax paid on certain large purchases, such as a vehicle. The KY Vehicle Usage Tax is collected just like a Sales Tax -- it is charged on the sale of the vehicle, and it is based on 6% (the Sales Tax Rate) of the value. The IRS has some guidance about "Compensating Use Taxes" which seems to say that the Usage Tax would qualify as a sales tax. Look at 26 USC 164.
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Louisiana - possibly by county
Maine communities are obligated to collect excise tax on all motor vehicles using the public roads. This is essentially a property tax on cars and trucks, but is figured a little differently than your property tax. The tax collector must determine the original sticker value (MSRP) of your vehicle. If it’s a brand new vehicle being registered, you are required by law to supply the tax collector with the Munroney Sticker (window sticker) given to you by the car dealer. This sets the basis for the excise tax collection. On used cars, the Tax Collector will look up the original MSRP in a book here at the town office. There is a sliding scale for the tax applied to the vehicle, starting at 24 mills for a current year vehicle, down to the lowest rate of 4 mills for a vehicle 6 years old and older. The excise tax is retained by the town, and is a major part of the funding for town services. Generally the excise tax is deductible from your federal income tax form, much like the property tax.
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Massachusetts - "Excise Tax" bill from municipality fully deductible
- Michigan
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Minnesota - see the link here
http://www.revenue.state.mn.us/individuals/individ_income/Pages/Deducting_Vehicle_License_Fees.aspx
- Mississippi
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Missouri - at some point, it appears that some counties did have a property tax but no evidence of this being current.
- Montana
- Nebraska
- Nevada
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New Hampshire - partially, see discussion
NH is a state where a portion of the annual registration fees are deductible. The "State Fees" are not deductible because the fee is predominately based on weight and does not comply with IRS provisions. The "municipal fees" [otherwise known as MOS/MILLS] are deductible because the town assesses the fee annually based on value.
The treasurer of each city, or such other person as the city government may designate, and the town clerk of each town shall collect fees for such permits as follows: on each vehicle offered for registration a sum equal to 18 mills on each dollar of the maker's list price for a current model year vehicle, 15 mills on each dollar of the maker's list price for the first preceding model year vehicle, 12 mills on each dollar of the maker's list price for the second preceding model year vehicle, 9 mills on each dollar of the maker's list price for the third preceding model year vehicle, 6 mills on each dollar of the maker's list price for the fourth preceding model year vehicle, and 3 mills on each dollar of the maker's list price for the fifth preceding model year vehicle and any model year prior thereto. In no event, however, shall the fee be less than $5.
[ The Mill rate is the amount of tax payable per dollar of the assessed value of a property. The mill rate is based on "mills"; as each mill is one-thousandth of a currency unit, one mill is equivalent to one-tenth of a cent or $0.001.]
Because NH requires an annual motor vehicle registration with the fees dependent on the Fair Market Value of the vehicle, the total amount of the registration fee varies depending upon the year, make and model of the vehicle. A portion of the fee will be tax-deductible for federal tax purposes. The New Hampshire registration fee is comprised of two components: personal property tax and a permit fee. when it was new; the list price is then depreciated to the current year of registration. This value will commonly approximate the current NADA blue book value for the vehicle.
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North Carolina - partially, see discussion
North Carolina collects a Highway Use Tax (HUT) on vehicles instead of a state sales tax. The tax is assessed each time a title is transferred. That is not deductible/
The Tag & Tax Together program combines your North Carolina vehicle's registration fees and property taxes into one renewal notice.
Look at your annual bill: Only the tax elements that show they are based on a per $ value are deductible. Where those tax element show that your motor vehicle is annually appraised for true monetary value and then taxed by your county and the tax is based on the appraised value found and due by the vehicle’s registration anniversary date. This process meets eligibility for tax deduction on U.S. tax returns.
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South Carolina - NO! not annual!
6% in 2007 and thereafter. SC Code §12-37-2645;
Because neither tax is assessed annually - neither registration fee nor property tax is deductible.
State registration fees are not deductible as they are not based on value.
South Carolina, payment of personal vehicle property taxes is required before a license plate can be issued or renewed. The taxes are paid directly to the county treasurer of the county where you live in South Carolina. Tax rates vary and are determined by the county auditor in each county.
Where the county or local municipality may impose a tax based on value that may vary from county to county or city to city, you must look at the bill that you received or else contact the Tax Assessor's Office in your city, town, or county
Personal property tax is deductible if it is a state or local tax that is:
Charged on personal property,
Based only on the value of the personal property, and
Charged on a yearly basis, even if it is collected more or less than once a year.
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GENERAL SALES TAX ON MOTOR VEHICLES, BOATS, ETC.
If you live in a state with no or low income tax, then it is likely to be beneficial to choose to report and deduct General Sales Tax - whether using the standard sales tax deduction for your state or your own calculation - you can include as an addition the sales tax on motor vehicles (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle), an aircraft or boat (if the tax rate was the same as the general sales tax rate)
If you live in a state with income tax, then it is often better to report and deduct the income tax instead.
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