Arizona's Vehicle Tax Deductions and Exemptions (2024)

Our Vehicle Recap Report Makes it Easy

As 2018 comes to a close, that means tax season is around the corner. Did you know some of the MVD costs for registering your vehicle are tax deductible? That means, some of the costs for vehicles you drive for personal or business use can be deducted on your income tax returns – saving you money!

FooteWork Auto License and Title Serviceoffers a Vehicle Recap Report which individualsand businessescanprovide to their accountant to include in their yearly Arizona deductions. The Vehicle Recap report will list all vehicles that were registered the previous year. Next to each vehicle in the report, there will be a list of fees that are eligible for deduction, as they apply to your vehicle. These fees may include:

• VLT (vehicle license tax)
• Special Plate fees
• Commercial Registration Fees
• Motor Carrier Fees
• Weight Fees

How is the Arizona Vehicle License Tax calculated?

The state of Arizona charges avehicle license tax (VLT)at every registration and renewal. This tax is assessed for each $100 of your vehicle’s value. Note that the value of your vehicle is calculated as 60% of the original manufacturer’s retail price, and that total will be lowered by 16.25% at everyregistration renewal.

For each $100 of the vehicle’s value, you will be assessed:

• New vehicles: $2.80.
• Used vehicles: $2.89.
• Alternative Fuel Vehicle: $4.

Vehicle License Tax Exemptions

These vehicle license tax exemptions are available at the time of application for an Arizona title and registration:

• Alternative Fuel:If your vehicle is powered only by liquefied petroleum gas (LPG, propane), natural gas (CNG/LNG), a blend of 70-percent alternative fuel and 30-percent petroleum-based fuel(not available in Arizona),hydrogen, orsolar. If the vehicle is converted to operate solely on alternative fuel, the Arizona Department of Environmental Quality must inspect the vehicle and issue anAlternative Fuel Certificate.
• Electric Vehicle:If you have a vehicle that is totally electric powered, with no other supporting fuel supply, your vehicle is eligible for reduced vehicle license tax.
• Health Officer:You are a commissioned, public health officer assigned to a government clinic or medical center in Arizona, but not an Arizona resident. You will need to submit an affidavit for exemption of nonresident service personnel issued and certified by the commanding officer.
• Leased School Bus:The vehicle is a bus leased by a school district. You will need to submit a copy of the lease contract or letter from the school district.
• Nongovernment Emergency Services:You are a private provider of ambulance, fire-fighter or rescue services, and your vehicle is used solely for emergency services. You will need to submit aNongovernment Emergency Service Vehicleform.
• Nonprofit:Proof that the association/institution is qualified as tax exempt is required. Proof consists of an Assessor’s Exemption letter, an Internal Revenue Service letter or an organization’s headquarters letter certifying the organization qualifies for the exemption under 26 U.S.C. 501(c)(3).
• Religious Institution:Proof that the association/institution is qualified as tax exempt is required. Proof consists of an Assessor’s Exemption letter, an Internal Revenue Service letter or an organization’s headquarters letter certifying the organization qualifies for the exemption under 26 U.S.C. 501(c)(3).
• School, Nonprofit:Proof that the association/institution is qualified as tax exempt is required. Proof consists of an Assessor’s Exemption letter, an Internal Revenue Service letter or an organization’s headquarters letter certifying the organization qualifies for the exemption under 26 U.S.C. 501(c)(3).
• Supplemental Security Income (SSI):You receive SSI disability payments from the federal government. This does not apply to regular Social Security disability benefits. You will need to submit a copy of your current annual benefit award letter or benefit verification printout from the Social Security Administration.
• Survivor of Fallen Responder:Used by a Surviving Spouse or a Surviving Dependent of a Law Enforcement Officer, Fire Fighter, orAmbulance Attendant who died in the line of duty on or after April 5,1933.You will need to submit aSurvivor of Fallen Responderform.
• Survivor of Fallen Military Member:Used by a Surviving Spouse or a Surviving Dependent of a member of the United States Military who died in the line of duty or from injuries suffered in the line of duty. ASurvivor of Fallen Military Member Exemptionform and a completed DD Form 1300 issued by the military are required.
• Tribal:You are an enrolled member of a tribe and live on a reservation. You will need to submit aVehicle License Tax Tribal Exemptionform.
• VA Grant:You received financial aid from the U.S. Department of Veterans Affairs to purchase your vehicle. You will need to submit a certified statement from the U.S. Department of Veterans Affairs.
• VA Disability:You are certified by the U.S. Department of Veterans Affairs to be 100-percent disabled and drawing compensation on that basis. The exemption also applies to the surviving spouse, until remarriage. You will need to submit a letter of eligibility from the Department of Veterans Affairs.
• Widow/Totally Disabled Person:You receive a widow, widower or totally disabled person property tax exemption from your county assessor. You will need to submit a certified statement from the assessor’s office.

Have questions? Need help? We are here for you! Come in to one of our four FooteWork Offices and see us and get yourVehicle Recap Report so you’re ready for tax season!