Property tax portion of vehicle registration fees

Forum|Forum|5 years ago
February 6, 2021
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vehicle was used for both personal and business (delivery) in Michigan.

one of the expense deductions is 'Property tax portion of vehicle registration fees'

Is this the same as the yearly SOS renewal registration fee?

if so, is the whole amount deductible in Michigan? how can we determine the deductible portion of that fee? and do we claim the whole amount or just part of it provided that the vehicle was used for personal and business.

KathrynG3

Yes; The whole amount is deductible in Michigan when itemizing because this tax in Michigan is based on the value alone. However, you are correct in to only claim the personal percentage of the fees as a Schedule A deduction. If you are taking actual expenses for your business vehicle, then claim the business percentage of the fees on the business return.

See 2020 Instructions for Schedule A, page 7 for Line 5c:

State and Local Personal Property Taxes Enter on line 5c the state and local personal property taxes you paid, but only if the taxes were based on value alone and were imposed on a yearly basis.

Example: You paid a yearly fee for the registration of your car. Part of the fee was based on the car's value and part was based on its weight. You can deduct only the part of the fee that was based on the car's value.