Sales Tax Paid for a Vehicle Used In Business
Sales tax is added to the purchase price (cost basis) of a vehicle used in a business. You may recover the total cost of the vehicle, including the sales tax, via depreciation deductions claimed over the recovery period of the vehicle.
Less than 100% Business Use
If you use your vehicle less than 100% for business, you deduct the business related portion on Schedule C and the personal-use portion of the sales tax on Schedule A (if you itemize) assuming it greater than your state income tax deduction.
In other words, on Schedule A you have a choice of deducting the greater of sales taxes or state income taxes paid during the tax year.
- Return to the Business Deductions Table of Contents to find related links