1. Home
  2. Taxes General Forum
  3. above the line deduction for use tax on car

above the line deduction for use tax on car

Obama's stimulus plan provides an above the line deduction on the sales tax of purchasing a new car, on the first 49500 of the cost of the car. If you buy a used car from an individual in California there is no sales tax when you purchase, but there is use tax when you register the car at the DMV. The use tax is basically the sales tax on the purchase price you paid. Is this use tax also deductible?

From the law I would imagine the answer is yes.

??(A) IN GENERAL.?For purposes of this section, the term ?qualified motor vehicle taxes? means any State or local sales or excise tax imposed on the purchase of a qualified motor vehicle.

Reply to
removeps-groups
Loading thread data ...

(i) IN GENERAL.?The term ?qualified motor vehicle? means? ??(I) a passenger automobile or light truck which is treated as a motor vehicle for purposes of title II of the Clean Air Act, the gross vehicle weight rating of which is not more than 8,500 pounds, and the original use of which commences with the tax- payer, ??(II) a motorcycle the gross vehicle weight rating of which is not more than 8,500 pounds and the original use of which commences with the taxpayer, and ??(III) a motor home the original use of which commences with the taxpayer.

Note the reference to "original use of which commences with the taxpayer." Used cars don't count.

Reply to
Alan

wrote

And as Alan mentioned, a "qualified" motor vehicle is a new vehicle (along with some other qualifiers).

Reply to
paulthomascpa

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.