Sales Tax on New Vehicle Purchases

Sales and Excise Tax on a New Motor Vehicle

You can deduct the state and local sales and excise tax on a new motor vehicle purchased after Feb. 16, 2009, and before Jan. 1, 2010.

If you are not itemizing deductions, add this amount to your standard deduction. If you are itemizing deductions and are claiming the deduction for state and local income tax, enter the deduction on Schedule A, line 7. If your adjusted gross income (AGI) is $135,000 or more ($260,000 or more if you are Married Filing Jointly), you can't claim the deduction.

If the purchase price of the motor vehicle is more than $49,500, you can deduct only the tax attributable to the first $49,500 of the purchase price.