The state of New Hampshire requires residents to annually register all motor vehicles. While the total amount of the registration fee varies depending upon the year, make and model of the vehicle, a portion of the fee will be tax-deductible for federal tax purposes. The New Hampshire registration fee is comprised of two components: personal property tax and a permit fee.
Personal Property Tax
The personal property tax is paid to the town of residency and is tax-deductible for federal income taxes. The tax is based on the list price of the vehicle when it was new; the list price is then depreciated to the current year of registration. This value will commonly approximate the current NADA blue book value for the vehicle.
The permit fee is paid to the state of New Hampshire and cannot be deducted for federal tax purposes. The state permit fee is based on the weight of the vehicle.
Federal Tax Deduction
The personal property tax portion is indicated on the New Hampshire vehicle registration in a box clearly labeled "State Fees and Municipal Fees." Fees contained within this box may be deducted on federal income taxes.
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Personal property taxes may be deducted on an individual's Form 1040 income tax return only if the taxpayer itemizes her deductions. Personal property taxes are claimed as an itemized deduction on Schedule A.
All individuals moving to New Hampshire must register their motor vehicles within 60 days of establishing residency in the state. Proof of residency -- such as a lease or rental agreement or current utility bill -- is required to register a motor vehicle.
New Hampshire requires a vehicle title before registration can be processed. When a new resident seeks to register a vehicle, he must first surrender his out-of-state title and complete an application for New Hampshire title. If the vehicle is purchased new from a New Hampshire dealer, a copy of the title application must be submitted to register the vehicle. Vehicles more than 15 years old do not require a title.