Personal property tax is deductible if it is a state or local tax that is:
- Charged on personal property,
- Based only on the value of the personal property, and
- Charged on a yearly basis, even if it is collected more than once a year, or less than once a year.
A tax that meets the above requirements can be considered charged on personal property even if it is for the exercise of a privilege. For example,
a yearly tax based on value qualifies as a personal property tax even if it is called a registration fee and is for the privilege of registering motor
vehicles or using them on the highways.
Example.
Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. You paid $32 based on the value ($1,500)
and weight (3,400 lbs.) of your car. You can deduct $15 (1% � $1,500) as a personal property tax, since it is based on the value. The remaining
$17 ($.50 � 34), based on the weight, is not deductible.
Previous | Next
Publication 17 | 2001 Tax Year Archives | Tax Help Archives | Home
