Sales tax deduction question

Botte Hork · Mar 2, 2013

I'm filling out my taxes and am wondering about the following: In 2012 I bought a new car in OR, but I live in WA. When registering it with the DMV/DOL, I paid an 8.7% "excise tax" (I believe it's called) when registering the vehicle. Does the IRS approve this? I guess more people have dealt with this in the southern WA regions. I prefer to not get myself into all kinds of audit troubles.

deen_ad · Mar 2, 2013

I guess you'd need to check the IRS rules since they're the ones that will let you know.

You can deduct sales/use tax using their charts or more if you can prove you paid more.

mortar maggot · Mar 3, 2013

There is a standard deduction amount that you can use, I do not know what that amount is.

Or you can have all of your reciepts, add them up and see if it is more than the standard amount.

Unless you bought a really nice car, or saved all your other reciepts, to go along with a normal type car you probably won't meet that standard deduction.

New Daddy · Mar 3, 2013

D/L Publication 17 from the IRS website. Generally, you can take the "standard" deduction for sales tax - PLUS you can separately schedule any major purchases. With the car, it may be funny. For example, a sales tax gets deducted as sales tax on Schedule A. However, the tax portion of your car tags can also be deducted on Schedule A. You can deduct one but not both (double dipping). Publication 17 should indicate the correct place.

Botte Hork · Mar 3, 2013

I'm using Turbotax and it indeed stated that I can take the standard plus and major ones separately. I didn't put the tags on (I think you mean registration fee?), as Clark county doesn't do the "RTA", but did add the tax portion listed on the registration. Now the only thing is: It is WA's use tax, the "sales tax replacement" because the dealer was in OR and the car of course needs to be registered here. So strictly speaking, it's not called "sales tax", but "use tax" that WA even describes as replacement for sales tax that wasn't paid. I was hoping someone knew whether the IRS would OK that move or that I basically screwed myself over by not pushing my broker service (yes, I absolutely HATE car dealers, scum of the earth, so I was happy to pay a little extra to have it taken care of) to get it in WA.

Botte Hork · Mar 8, 2013

Update: Spoke to a CPA friend who said that 'instruction A' (if I remember correctly) states one can deduct the use tax as well, so I'm happy happy happy.

I should stop watching Duck Dynasty.