Certain states allow people with disabilities to apply for a sales tax exemption on the purchase of a motor vehicle. Both paraplegic individuals and disabled veterans who satisfy the requirements can take advantage of this exemption, which may also include parents or guardians of qualifying minor children or incapacitated adults. The exemption is largely based on offsetting the costs for vehicle modifications, such as:
- Wheelchair lifts and ramps
- Electronic hand controls
- Left-side accelerator pedals
- Raised ceilings
- Lowered floors
Even some driving expenses for medical purposes may be tax-deductible like gas, parking, and tolls when traveling to visit your doctor or hospital.
Every state has unique laws regarding vehicle sales tax exemption requirements for people with disabilities. Check with your local tax agencies to locate and submit the correct forms. They should also indicate any medical information that may be required. You can also speak with a local tax advisor about additional tax credits you may qualify for or request a refund for qualified exemptions on an amended tax return.
Veterans with disabilities may be required to register their vehicle in their own name and provide a letter from the Veterans Administration indicating that the disability is mainly service-related.
A non-veteran may only need to file a form with a doctor's signature and don’t always need to own and register the vehicle.
State laws may allow parents or guardians of disabled individuals to be the owners. Your state tax agency should clarify the rules regarding ownership of a vehicle purchased by a parent or legal guardian of a minor child.
In the case of an adult disabled individual, the guardian or conservator may claim the vehicle sales tax exemption, providing that the guardian or conservator's name appears on the required state form as the vehicle owner, and providing that the vehicle is registered to the qualifying disabled adult. To qualify, the disabled adult must be unable to enter into a legal contract on their own.
Dealing with government agencies to get answers can be a lengthy and frustrating process. We recommend finding a local special needs planner to work with your tax advisor to submit the necessary paperwork and file for the exemption correctly on your tax forms.