Latest update: February 12, 2025 - 10 min read
Are Car Registration Fees Tax-Deductible?
As a self-employed individual who drives for business, you can claim a federal income tax deduction on a portion of your vehicle registration fees.
The part of car registration fee that’s tax-deductible must be charged based on the vehicle’s value. If that’s the case for your car, you’ll need to apply the itemized vs standard deduction to claim the deduction.
How the vehicle registration fee is calculated largely depends on your state, as some states don’t allow this deduction at all. Keep reading for a full overview of how it’s calculated in each U.S. state.
How to deduct vehicle registration fees on your tax return
To deduct vehicle registration fees on your federal tax return, you need to use the IRS Form 1040, Schedule A, and write down your deductible claim in line for “State and local personal property taxes.”
Remember that you can only deduct fees calculated based on the vehicle’s value. If the fee is a flat rate or based on other criteria (age, weight, type of vehicle), you won’t be able to deduct it.
Example calculation
Let’s see how much you could actually deduct based on an example formula below.
Let’s say the annual vehicle registration fee on your car is made up of the following amounts:
If we calculated the deduction for a vehicle that weighed 3,500 pounds and had a value of $35,000 as estimated by the state, this is how you’d calculate your registration fee: (3,500lbs weight ÷ 100) x $1 = $35 ($35,000 in vehicle value ÷ $1,000) x $1 = $35 $35 weight fee + $35 value fee + $15 license plate tabs + $20 taxes and charges = $105 total car registration fee Deductible portion of the fee: $35 (value-based portion) |
What states can you deduct vehicle registration fees in?
Note that not all states have value-based vehicle registration fees. If none of your vehicle registration fees are based on the car’s value, you won’t be able to deduct them.
Here’s a list of all states that have value-based car registration fees, along with the specific fees that fall into this category. We’ve also indicated which states don’t allow the car registration fee deduction at all.
| State | Deductible/non-deductible registration fees and the portion you can claim a deduction on |
| Alabama | Ad Valorem Tax (Personal Property Tax) |
| Alaska | Not deductible |
| Arizona | Vehicle License Tax (VLT) |
| Arkansas | Not deductible. However, you can deduct the value-based Ad Valorem Tax paid to your county. |
| California | Vehicle License Fee (VLF) |
| Colorado | Ownership Tax |
| Connecticut | Not deductible. However, you can deduct the value-based Property Tax paid to your city or county. |
| Delaware | Not deductible |
| Florida | Not deductible |
| Georgia | The Annual Ad Valorem Tax. This applies to most cars purchased before March 1, 2013, as well as non-titled vehicles. You cannot deduct the Title Ad Valorem Tax (TAVT). |
| Hawaii | Not deductible |
| Idaho | Not deductible |
| Illinois | Not deductible |
| Indiana | Excise Tax Fees |
| Iowa | Value-based portion of your Vehicle Registration Fee |
| Kansas | Not deductible. However, you can deduct the value-based personal Property Tax paid to your county. |
| Kentucky | Value-based portion of your Vehicle Registration Fee |
| Louisiana | Value-based portion of the License Plate Fee |
| Maine | Not deductible. However, you can deduct the value-based excise taxes paid to your city or county. |
| Maryland | Not deductible |
| Massachusetts | Motor Vehicle Excise Tax |
| Michigan | The License Fee paid based on the vehicle’s value (for models from 1984 or newer). |
| Minnesota | Registration Tax |
| Mississippi | Ad valorem Tax |
| Missouri | The Personal Property Tax portion of the vehicle registration fees. |
| Montana | County Option Tax |
| Nebraska | Motor Vehicle Tax |
| Nevada | Motor Vehicle Tax |
| New Hampshire | The Municipal Fees part of your vehicle registration fees. |
| New Jersey | Not deductible |
| New Mexico | Not deductible |
| New York | Not deductible |
| North Carolina | Vehicle Property Tax |
| North Dakota | Not deductible |
| Ohio | Not deductible |
| Oklahoma | Not deductible |
| Oregon | Not deductible |
| Pennsylvania | Not deductible |
| Rhode Island | Not deductible. However, you can deduct the value-based excise tax paid to your city or town. |
| South Carolina | Value-based Personal Property Tax |
| South Dakota | Not deductible |
| Tennessee | Not deductible |
| Texas | Not deductible |
| Utah | Not deductible |
| Vermont | Not deductible |
| Virginia | Not deductible. However, you can deduct the value-based Personal Property Tax paid to your city or town. |
| Washington | Regional Transit Authority (RTA) tax if required by your county. |
| West Virginia | Not deductible. However, you can deduct the value-based personal property tax paid to your county. |
| Wisconsin | Not deductible |
| Wyoming | Value-based portion of your Vehicle Registration Fee |
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