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Today TaxMama hears from Ruth in Washington state who tells us, “I’ve just registered a vehicle in WA state after moving from AZ. They require out of state registrants to pay a “use/sales tax” on motorhomes. Mine was almost $3,000. Will I be able to deduct this from IRS taxes?”

Hi Ruth

WOW! That’s quite uninviting!

Even if it’s not new or recently purchased? Hmph – they don’t have a state income tax – so they
generate revenue this way. Nasty.

But, sure, of course! You certainly may.

Well, it depends. Like all tax matters…

If you are able to itemize on your tax return, then you might be able to deduct this sales tax. But you may not want to. Here’s what you do – run the numbers.

See what IRS allows you for the general sales tax deduction from the tables and add in this $3,000.

Compare that to any state income tax you paid this year. Obviously none in WA, but perhaps you will have paid a bundle to AZ?

Most likely, your total sales tax will be higher – so, yes, you’ll be able to deduct it.

Of course, if you don’t itemize – no mortgage, or your interest rates are so low you don’t have a deduction,
this $3,000 may increase your deductions enough to make itemizing possible.

If not…oh well. Just add it to the cost of the motorhome to increase your loss when you finally sell it.

Enjoy Washington State.
And remember, you can find answers to tax questions about deducting things and all kinds of tax issues, free. Where? Where else? At TaxMama.com

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