Is car excise tax a personal property tax?

Is a car considered personal property for tax purposes?

Car fees go on the line for “state and local personal property taxes.” … Nevertheless, if the fee is value-based and assessed on a yearly basis, the IRS considers it a deductible personal property tax.

Can I write off excise tax on my taxes?

The federal government charges excise taxes on the sale or use of a wide variety of products. An excise tax isn’t deductible if it’s for a personal expense. You can deduct as a business expense excise taxes that are ordinary and necessary expenses of carrying on your trade or business.

What is a vehicle excise tax?

Motor vehicle excise tax is an annual tax for the privilege of registering a motor vehicle or trailer. … The value of the vehicle is determined by the Registry formula taking the applicable percentage for the year of the Manufacturer’s Suggested Retail Price (MSRP).

What vehicle expenses are tax deductible?

If you decide to use the actual expenses method, additional auto-related expenses are deductible, such as,

  • Gas and oil.
  • Maintenance and repairs.
  • Tires.
  • Registration fees and taxes*
  • Licenses.
  • Vehicle loan interest*
  • Insurance.
  • Rental or lease payments.
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Is ad valorem tax the same as property tax?

Ad valorem property taxes are typically a major, if not the major, revenue source for both state and municipal governments, and municipal property ad valorem taxes are commonly referred to as simply “property taxes.”

Can I deduct car excise tax on my federal return?

A: Yes, vehicle excise tax is a proper itemized tax deduction. … It is, therefore, deductible, provided you itemize your deductions. This is not the case of a “tax” that is actually a fee for service, such as water and sewer charges, are not taxes (for purposes of federal tax deductibility) and are not deductible.

What is the difference between excise tax and personal property tax?

Personal property tax is an excise tax based on the value of the items that are mobile, such as vehicles and boats. You may qualify for a personal property tax deduction on your state and local taxes if the tax meets all of these requirements: In proportion to the value of the property.

Why do we pay excise tax on cars?

The excise tax isn’t “supposed” to go for road repairs. It goes into the general fund of each city and town that collects the tax. … “Motor Vehicle Excise tax revenue goes to a community’s general fund for the support of the general operating budget. Use of this revenue is unrestricted.”

What type of tax is an excise tax?

An excise tax, unlike a sales tax, is an indirect tax. … According to the Internal Revenue Service, excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. The price of something subject to an excise tax often includes the tax in the price of the product.

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