Michigan Preparers - Auto Property Tax

[JohnH]

I see that the Michigan Motor Vehicle Registration Tax is based on the value of the vehicle, so does that mean that even though it isn't called a property tax, it qualifies as personal property tax deductible on Line 7 of Schedule A?

[travis bickle]

Coitainly

I see that the Michigan Motor Vehicle Registration Tax is based on the value of the vehicle, so does that mean that even though it isn't called a property tax, it qualifies as personal property tax deductible on Line 7 of Schedule A?

Here is the exact language from the Sch A instructions -

Enter the state and local personal property 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.

[emphasis added]

[JohnH]

Thanks Travis. Yes, that;'s my understanding too, but I just wanted to verify by asking if Michigan preparers routinely deduct auto property tax.

[LawrenceGR]

John H

In years past auto plates were based on weight, I don't remember the year it changed. If you look at the registration you will see a catagory if that number is double digits it based on value, if the number is four digits it's based on weight.

[Anarchrist]

It changed from weight to value two or three decades ago. MI auto registrations are deductible on sch A as personal property tax. Off the top of my head, historical vehicle plates are not based on value so those would not be deductible, but all others would. Registrations for motorcycles, trailers, and boats are not based on value.

[JohnH]

Thanks to both of you for the clarification. I had a client in Michigan and I was deducting auto regisgtration as property tax, but they moved about 4 years ago. Then in 2008 another client moved to Michigan, but when I asked for their auto property registration info they replied that it wasn't a deductible property tax. This made me begin to question whether I was handling it wrong in the past, and of course what to do now. I'll press the client to give me the info. They moved into the state in July 2008, so I assume they probably paid the registration sometime around that time.