Depending on your situation and your state, you might just qualify for some tax deductions on your RV if you own your own rig. If so, you may also qualify for an additional tax deduction under business use. California requires one to pay sales tax on any vehicle purchased there, unless it is shipped out of state after the sale by a bonded carrier. Thus, if the benefits of the deductions on your RV mortgage interest or business expenses would total to less than these numbers, it’s not worth itemizing them. These states including New Hampshire, Oregon, Alaska, and Delaware require a person to be the legal resident to register their RVs. Take the mileage deduction if you traveled specifically for business purposes But chances are, if your RV isn’t custom-made and pretty strange at that, you’re in the clear. You can still consider moving to the cheapest state to buy RV (where the combined sales tax will be lower than what you have to pay in your primary state). State Car Tax Rate Tools; Alabama: 2% + county rate + city rate = total: Tax Brochure: Link Tip: Select city then click both city and county box. With local taxes, the total sales tax rate is between 5.000% and 11.500%. There are many companies that help out-of-the-state people to complete the whole process for a small fee. As you can see, there are a wide variety of RV tax deductions that can make owning one a boon at tax time. Direct: 406-363-4355. The minimum combined 2021 sales tax rate for Phoenix, Arizona is . Sales by individuals do not necessarily reflect fair market value. Montana and Texas are the best states for purchasing an RV. But be careful. Select the Arizona city from the list of popular cities below to see its current sales tax rate. Alabama has recent rate changes (Wed Jul 01 2020). Menu. A home includes a house, condominium, State & local taxes or sales tax (personal property tax, real estate tax, sales tax) Mortgage interest – this includes RV loan interest if your RV is used to secure the loan If you don’t have enough to take itemized deductions, then use the standard deduction. Alaska could be one of the choices too. Motor Vehicle Sales Tax Rates by State as of December 31, 2017 Motor Vehicles Sold in Florida to Residents of Another State Florida law allows a partial exemption of sales and use tax to be collected on a motor vehicle purchased by a resident of another state. However, the tow vehicle you use to haul a fifth wheel or other travel trailer does not benefit from this tax deduction. Introduction. What is different among the states is how long you have to have the RV registered in the no-sales-tax state before the new state no longer asks you to pay their use tax. Sales tax rates differ by state, but sales tax bases also impact how much revenue is collected from a tax and how the tax affects the economy. The state sales tax rate in Illinois is 6.250%. All states except Illinois exempt prescription drugs from sales tax, and Illinois taxes them at just 1 percent, compared with 6.25 percent for its statewide sales tax. To qualify for the interest tax deduction, your motorhome does have to meet certain requirements. And if you’re living full time in your RV as a residency, it definitely qualifies for a primary home tax deduction. by Brad (BC) California requires one to pay sales tax on any vehicle purchased there, unless it is shipped out of state after the sale by a bonded carrier. 1. These combined rates range from 9.22% in Alabama up to 9.52% in Louisiana as of 2020. But, does it make sense to drive to another state to evade sales tax or get other monetary benefits? Don’t forget to take your time because purchasing an RV is like making an investment and you should use the best of your judgment to make that decision. 3. However, you will need to visit that new state after certain periods to renew the driver’s license, vehicle registration, and other related documents. Generally, if you paid a Sales tax of 6.25% or more to another state, you would not have to pay a Use tax to Massachusetts. You can consider any of these six states as the cheapest state to buy RV: Since you have to pay personal property tax on the possession of vehicles, furniture, and other personal items, you can take Florida and Washington off this list. Sections 27-65-17, 27-65-20 & 27-65-25) The following are subject to sales tax equal to 7% of the gross proceeds of the retail sales of the business, unless otherwise provided: 1. Figure 1. Sections 27-65-17, 27-65-20 & 27-65-25) The following are subject to sales tax equal to 7% of the gross proceeds of the retail sales of the business, unless otherwise provided: Vehicle and Watercraft Information. And if your RV functions purely as a rental vehicle, then it’s ONLY a business expense, which means you can write off far more of the costs related to its care and maintenance. While still the highest state sales tax rate in the nation, California’s state rate did decrease slightly, from 7.5 percent to 7.25 percent, due to the expiration of Proposition 30. Sales tax is a tax paid to a governing body (state or local) for the sale of certain goods and services. However, some other states that do not impose a general sales tax have fixed the loopholes in the law and don’t allow just anyone to register the vehicles. State State Rate Range of Local Rates Local Rates Apply to Use Tax; Alabama: 4.000%. Manufacturing … Depending on local municipalities, the total tax rate can be as high as 6%. But what about those of us who use our rigs as a full-time residence — or even just live in it part-time? You’d need to provide proof and documentation of all the income you generated with the RV, and, if living in it was part of your business model, you’d need to have a log of all the nights you spent in it and all the miles you drove it. As tax-friendly as they are, making an annual pilgrimage that far north is a bit extreme. The state sales tax rate in Alabama is 4.000%. 4. Washington law requires use tax be collected on fair market value of a vehicle. Other, local-level tax rates in the state of South Dakota are quite complex compared against local-level tax rates in other states. The general sales tax in Montana is 0%. However, some other states that do not impose a general sales tax have fixed the loopholes in the law and don’t allow just anyone to register the vehicles. For example, Leon County has a 1.5 percent local option tax on the first $5,000, for a maximum of $75. However, most states don’t register the vehicles of just anyone who comes along; registrants usually must be … 2. Currently working as a blogger, he takes pride in providing comprehensive contents about camping knowledge, survival skills based on his own experience. Some local jurisdictions do not impose a sales tax. Besides, Montana is open to the outsiders who want to purchase and register an RV there. It has more than 15,000 members who consider Texas as their home although most of them don’t live there or spend a little time. An option (as other readers have pointed out) that I think I should add to this web page is to arrange to have your RV delivered to the border. They must pay sales tax on all goods and retail services they purchase as consumers, such as supplies, lodging, equipment, and construction services. The purchase process and the transactions are well-documented so that the law enforcement and tax officials can track them easily. It’s easy to get sucked into debt when you’re shelling out interest for an asset that’s losing value by the minute. So, despite being tax-friendly, making an annual trip to Alaska will be a bit extreme and expensive. There are also ownership taxes for the registration but that is separate from the sales taxes. Currently there are eight non-reciprocal states (AZ, CA, FL, HI, MA, MI, NC, and SC) where the RV sale would not be exempt and a special tax rate applies. Here’s more of what you need to know about qualifying your RV as a second home. All but five U.S. states have a statewide sales tax which is collected on most consumer purchases made within state borders. 0% – 9.0% Some local jurisdictions do not impose a sales tax.. Yes/No Some of the cities and counties do apply use tax. The state sales tax rate in Arizona is 5.600%. 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