Are excise taxes for a vehicle deductible?

Excise taxes for a vehicle are generally not deductible if they are for personal expenses. However, if the excise taxes are ordinary and necessary expenses of carrying on a trade or business, they can be deducted as a business expense on Schedule C (Form 1040). This includes excise taxes on gasoline, diesel fuel, and other motor fuels used in the business, which are typically included as part of the cost of the fuel and not deducted separately.

For personal vehicles, excise taxes are not deductible. Specifically, the federal excise tax on the purchase of a gas guzzler vehicle is not deductible. Additionally, any excise tax paid on the purchase of a vehicle is included as part of the cost of the vehicle and recovered through depreciation if the vehicle is used in a business.

In summary:

• Personal Use: Excise taxes on a vehicle are not deductible.
• Business Use: Excise taxes that are ordinary and necessary business expenses can be deducted on Schedule C (Form 1040). Taxes on motor fuels used in the business are included in the cost of the fuel and not deducted separately.

Sources:
Publication 17 (2023)
Publication 530 (2023)
Publication 4787 (1/2010)
Publication 334 (2023)
§ 164. Taxes
Publication 463 (2023)