You can deduct tax on a new car, what about a used one that was purchased?

Question

Can you deduct the sales tax on the purchase of a used vehicle, like a boat or motorcycle?

Answer 1

Sales tax - NO

Answer 2

If you itemize, you have a choice of claiming state and local taxes, or sales tax. For sales tax there's a table that depends on state, income and family size that has an amount you can deduct for sales tax without keeping all your receipts. You can add sales tax paid for a car (new or used), a boat, or a plane to that table amount. Not a motorcycle. If you saved all your receipts and added them up, you could include the sales tax paid on a motorcycle.

Answer 3

Yes, you can! If you read the form instructions, the IRS makes no distinction about the age or condition of the item purchased; "new" and "used" are never mentioned.

But you can only deduct the sales tax if you file using itemized deductions (Schedule A) and choose to deduct state and local SALES taxes paid, rather than state and local INCOME taxes paid. Check the following IRS links for more details. Good luck! :-)