The vehicle is subject to California DMV registration during the first 12 months of ownership. Personal Property Tax Included in Vehicle Registration Fee. If your registration fees are not based on the value of your vehicle (some states base the fee on the weight of the vehicle), you cannot claim this as a deduction on your return. Please note: the amount deductible from your California Vehicle Registration Billing Notice is only the amount titled California motor vehicle license fee, not the entire amount you pay to the CA DMV. For instance, a California taxpayer currently paying federal taxes at the highest marginal tax rate would only realize about three-fifths of any VLF reduction. Start today. But have a copy of your registration invoice close at hand. Every dollar you deserve. These fees are separate from the taxes … Every deduction found. Only the amount based on the value can be claimed as a deduction. If the tax is based partly on the value and partly based on other criteria, it can partly qualify. If you register your car in California, you can deduct part of your vehicle’s registration fees on your federal tax return. The California vehicle tax is 7.5 percent, but this simple number only gives you a rough idea of what you'll really pay for a new car. You paid $32 based on the value ($1,500) and weight (3,400 lbs.) One more thing: You might be able to get a vehicle registration tax deduction. Many states charge extra fees for late registration. In a review of recent income tax data, it appears that many taxpayers who itemized did not claim the personal property tax deduction … If purchased by a nonresident of California, the vehicle is used or stored in California more than one-half of the time during the first 12 months of ownership. License Plate Fee: The license plate cost might be included in your registration, or billed separately. Example. Dealerships may also charge a documentation fee or "doc fee", which covers the costs incurred by the dealership preparing and filing the sales contract, sales tax documents, etc. You can deduct the amounts actually paid Jan 1, 2015 - Dec 31, 2015.If you paid both your 2015 and 2016 amounts during the 2015, then deduct both on your 2015 return.. How to Claim the Vehicle Sales Tax Deduction . Your state charges a yearly motor vehicle registration tax of 1% of value plus 50 cents per hundredweight. The rate of sale tax you paid must be the same as the general sales tax rate, otherwise you can only deduct the general sales tax rate. Functional use means use for the purposes for which the vehicle was designed. The sales tax is higher in many areas due to district taxes. If the tax is partly based on value and partly based on other criteria, it may qualify in part. Car registration is $60. of your car. Some areas have more than one district tax, pushing sales taxes up even more. California statewide sales tax on new & used vehicles is 7.25%. Part of your vehicle's registration fee may include a personal property tax depending on the state in which you live. Average DMV fees in California on a new-car purchase add up to $244 1, which includes the title, registration, and plate fees shown above.. California Documentation Fees .