Do People With Disabilities Get Vehicle Sales Tax Exemption?

Many states allow people with disabilities to qualify for a sales tax exemption when purchasing a vehicle. Individuals with mobility issues, paraplegics, and disabled veterans who satisfy the requirements can take advantage of this exemption. This may also include parents or guardians of qualifying minor children or adults with disabilities. The exemption focuses on covering the additional costs for adaptive vehicle equipment, such as:

• Wheelchair lifts and ramps
• Electronic hand controls
• Left-side accelerator pedals
• Raised ceilings
• Lowered floors

Some driving expenses for medical purposes may also be tax-deductible for people with disabilities, like gas, parking, and tolls when visiting doctors, clinics, or hospitals.

Who Qualifies

Every state has unique laws regarding vehicle sales tax exemption requirements for people with disabilities. Check with the local Department of Motor Vehicles (DMV) and tax agencies for requirements and the correct forms. These agencies should also indicate any medical information that they may require.

Speak with a tax professional about additional tax credits for which you may qualify. They also can help you determine how to request a refund for qualified exemptions on an amended tax return.

7 Common State Requirements

1. Disability certification from a licensed medical professional or state agency is required. Temporary disabilities may not always qualify. The state may base exemptions on permanent disability.

2. The type of disability — specific types of mobility impairments — may consider the following:

• Vision
• Muscle strength
• Flexibility
• Range of motion
• Hand-eye coordination
• Reaction time, judgment
• Decision-making
• Medications being taken
• Ability to handle adaptive equipment

3. The person with the disability may need to be the registered vehicle owner to qualify for the exemption.

4. Your state may limit vehicle purchases to certain types of vehicles used for personal rather than commercial transportation.

5. The purchase of adaptive equipment for vehicles may be tied to the tax exemption as an item purchased for medical purposes that helps people with disabilities live independent lives.

6. Income limits may be a factor in determining whether you qualify.

7. Displaying disability parking placards or license plates may also be required to access vehicle sales tax exemptions. However, registration and license plate fees may be reduced or waived.

Application processes are state-specific, and individuals must follow their rules to claim the disability-related vehicle tax exemption. This list of requirements is only an example of legislation found in various states.

Vehicle Ownership

Veterans with disabilities may be required to register their vehicle in their own name and provide a letter from the United States Department of Veterans Affairs (VA) indicating that the disability is partially or fully service related.

A nonveteran 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 with disabilities, 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.

More About Disabled Veterans

Disabled veterans may have additional requirements and benefits with regard to vehicle property and sales tax exemptions or reductions. Some common conditions for disabled veterans include:

1. Veteran disability status must be determined and documented by the VA.
    
2. Exemptions are based on service-connected disabilities resulting from or aggravated by military service.
    
3. The percentage of disability determined by the VA can dictate different levels of benefits with higher percentages receiving increased exemptions.
    
4. Purple Heart recipients may get additional benefits, regardless of the percentage of disability.
    
5. Special license plates may be required for parking privileges and exemptions from certain vehicle-related fees.
    
6. Spousal benefits may extend to the spouses of disabled veterans, allowing them to qualify for certain vehicle exemptions or reductions.
    
7. Adaptive vehicle allowances or grants require submitting forms before purchasing the vehicle.

Be sure to contact your state's VA office or DMV to understand the specific requirements and benefits available to disabled veterans in your state.

Connect With an Attorney

Dealing with government agencies to get answers can be a lengthy, frustrating process for veterans and individuals with disabilities. A special needs planning attorney can help advocate for and advise you. They may assist with the following:

• explaining the available exemptions, reduced rates, and other benefits related to vehicle taxes in your state
• guiding you through the eligibility process
• following the latest procedures for partial or complete exemptions
• confirming the most recent requirements to ensure your specific situation qualifies for an exemption
• submitting the necessary paperwork
• filing for the exemption correctly on tax forms

Find a qualified special needs planning attorney near you today for guidance.