Montana requires that both residents and individuals working in Montana register their vehicles with the county where they live or work. Montana has no sales or use tax and no vehicle inspections.

A tax accountant the Chronicle quoted in a story on tax tips ahead of the April 18 filing deadline suggested that Texas taxpayers could deduct the cost of their annual vehicle registration … If the annual vehicle fee meets the criteria for a federal property tax deduction, individuals should check whether it is also a state deduction. Many people believe that the entire amount you pay for car registration fees is tax deductible. What portion of the car registration fees are tax deductible? Are your car registration fees tax deductible on your Form 1040? The gross taxable weight of a vehicle is determined by adding: the actual unloaded weight of the vehicle fully equipped for service.

According to MCA 61-3-311, all Montana vehicles avoid sales tax.

It can only work with LLCs formed in Montana because Montana is the only state which imposes no sales tax on the purchase of vehicles by …

How? There are two methods for figuring car expenses:

How?

Individuals who own a business or are self-employed and use their vehicle for business may deduct car expenses on their tax return. In order to receive the car registration deduction, your state must base its registration fee (or at least partly base it) on vehicle value, as opposed to weight. If you claim the standard deduction on your federal income tax return, you may still claim itemized deductions on your Montana return and lower your Montana income taxes. The taxable value for passenger cars, pickup trucks, vans and sport utility vehicles previously registered in Montana is based on the manufacturers’ suggested retail price, depreciated according to a set schedule as the vehicle ages.

Registration, administrative, or emission testing fees, or tag or plate fees are not deductible for federal purposes. Boats under 16 feet and Jet Skis $105.85.

Are your car registration fees tax deductible on your Form 1040?

For example, your total registration fee might be $175, but if that includes $2 for each $1,000 of value and your car is worth $30,000, your actual tax deduction is limited to $60 of that $175, or $2 times 30.

For federal tax purposes, only the portion of the registration fee that’s based on the value of your vehicle is tax deductible. Find out how auto registration can be tax deductible When are vehicle registration fees deductible? For more information on registration fees and requirements, please visit the Montana State Motor Vehicle Web Site.