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Sales Tax Deduction for Vehicle Purchases

The Sales Tax Deduction for Vehicle Purchases is a tax deduction that allows taxpayers to deduct the state and local sales or excise taxes paid on the purchase of a new car, light truck, motor home, or motorcycle. The deduction is available regardless of whether you itemize deductions.

Though the number of vehicles for which you can claim the credit is unlimited, you can only deduct the taxes paid on the first $49,500 of each vehicle. In states without a sales tax, you may be able to deduct other taxes or fees you paid.

In order to qualify for the deduction, the vehicle must have been purchased between February 17, 2009 and December 31, 2009.

The deduction phases out for single filers between modified adjusted gross incomes of $125,000 and $135,000 and for married couples filing jointly between $250,000 and $260,000.