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TaxTom, Internet Researcher
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Each of my two children bought a new car in North Carolina

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Each of my two children bought a new car in North Carolina in 2010- I think there is a 3% fee that was paid to the dealer at purchase. Is that a sales tax or a title fee? Is it deductible on their income taxes? I know when you transfer title from one individual to another you have to pay a 3% fee to the DMV. I may be getting this confused with the personal property taxes that the counties charge.

Just don't know - thanks.

TaxTom :

Hello, That is a highway use tax. It is deductible. Thanks Tom

Highway Use Tax: Based on Vehicle's Purchase Price or Value
For a detailed explanation of Highway Use Tax (HUT), you can view our Vehicle Titling & Registration: Highway Use Tax Section.
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