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Special interest license plate fees are now charitable deductions

Monday, December 14, 2009

Special interest license plate fees are now charitable deductions

Taxpayers who purchase special interest license plates — California Firefighter, Arts, Environmental, etc. — from the DMV may deduct the additional fee imposed for the special interest plate as a charitable contribution. (FTB Information Letter 2009-02 dated November 25, 2009, available at: www.ftb.ca.gov/law/infoletter/112509.pdf)

Spidell believes that the IRS will also allow the fees to be deducted as a charitable deduction, using the same rationale as FTB: When a taxpayer purchases an item for value from a qualified charity with the intention of making a gift, the excess of the payment over the value received is a charitable contribution.

For a list of special interest license plates and their fees, go to: www.dmv.ca.gov/forms/reg/reg17.pdf

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