In most cases, car shipping costs are not tax-deductible. However, there are important exceptions for active-duty military members, businesses transporting vehicles for work, and taxpayers who qualify under certain state tax laws.
Understanding today's moving expense tax rules starts with two major federal laws. The Tax Cuts and Jobs Act (TCJA) suspended most moving expense deductions beginning in 2018. The One Big Beautiful Bill Act (OBBBA) later made those changes permanent for civilian taxpayers.
Why Tax Rules Matter When Shipping a Car
Vehicle transportation plays a significant role in the U.S. economy. The auto transport brokerage market generates an estimated $12 billion in annual revenue and includes more than 30,000 FMCSA-registered property brokers nationwide. In 2025, nearly 10 million vehicles were transported through the Super Dispatch platform, covering approximately 4.5 billion miles and generating more than $5 billion in carrier revenue.
With millions of vehicles shipped each year for job relocations, business operations, military moves, online vehicle purchases, and seasonal travel, understanding when transportation costs qualify for a tax deduction can help individuals and businesses make more informed financial decisions and avoid unexpected tax liabilities.
Most Personal Car Shipping Costs Are Not Tax Deductible
If you're moving for a new job, relocating after retirement, attending college, or buying a vehicle from another state, your shipping costs are generally considered personal expenses.
Before 2018, taxpayers who met certain IRS requirements could claim an above-the-line deduction for moving expenses that included the transportation of a personal vehicle. That deduction no longer exists for civilians under current federal law.
This means that even if moving your vehicle is necessary to start a new job, the shipping cost usually cannot be deducted on your federal income tax return.
When a Car Shipping Tax Deduction Is Still Available
Active-duty Military PCS Moves
The biggest federal exception applies to active-duty members of the U.S. Armed Forces moving under official Permanent Change of Station (PCS) orders.
Eligible service members may deduct qualified moving expenses, including the cost of shipping a personal vehicle, by filing IRS Form 3903, provided those expenses were not already paid directly by the government. The average government-funded PCS relocation costs approximately $13,000, making this deduction especially valuable for military families.
Auto Transport Business Expense
Businesses can also deduct vehicle transportation when it qualifies as an ordinary and necessary operating expense under Internal Revenue Code Section 162.
This commonly applies to:
Fleet vehicles
Company-owned trucks
Dealer inventory
Business relocations
Project vehicles
Self-employed individuals typically report these expenses on Schedule C, using vehicle deductions, while partnerships and corporations claim them on their respective business tax returns. If a vehicle has both personal and business use, only the documented business-use percentage is deductible.
Most W-2 Employees Cannot Deduct Relocation Costs
Current federal law generally does not allow unreimbursed employee moving expenses, including vehicle transport. Instead, employer-paid relocations are typically treated as taxable compensation.
For most civilian employees, relocation reimbursements are subject to the 22 percent supplemental wages tax rate, plus payroll taxes, including 6.2 percent Social Security and 1.45 percent Medicare, for a combined employee-paid FICA rate of 7.65 percent, subject to the 2026 Social Security wage base of $184,500.
State-Level Moving Deductions Still Exist
Federal law does not automatically determine state tax treatment. Several states continue to recognize state-level moving deductions or income exclusions under their own tax laws. California and New York are among the best-known examples.
Eligible California taxpayers may qualify for the California FTB Form 3913 moving expense deduction, while qualifying New York residents may use the New York IT-196 itemized moving deduction. California has also adjusted its moving mileage rate several times, increasing from 16 cents per mile in 2021 to 18 cents in early 2022 and to 22 cents in late 2022 and throughout 2023.
State rules differ significantly, so taxpayers should review their state's current requirements before assuming a deduction is available.
Does Shipping Method Affect Your Taxes?
No. Choosing open or enclosed transport does not determine whether your shipment is deductible. It can, however, affect the amount you pay. Open vs enclosed transport pricing differs substantially, with enclosed transport typically costing 40 percent to 60 percent more because it offers greater protection.
Shipping prices also follow a declining cost-per-mile shipping rate. Industry averages are approximately:
Medical and Charitable Exceptions
Some transportation expenses qualify under different IRS rules. For qualifying medical travel, the federal mileage rate is 21 cents per mile for the 2024 and 2025 tax years. Charitable volunteer driving uses a rate of 14 cents per mile. These rules apply to eligible transportation directly connected to medical care or charitable service, not to ordinary relocation expenses.
Shipping a Vehicle with AmeriFreight Auto Transport
Whether your shipment qualifies for a tax deduction or not, choosing the right transport service still matters. AmeriFreight Auto Transport works with FMCSA-registered carriers throughout the continental United States and offers both open and enclosed vehicle transport.
Customers can choose Door-to-Door Service (Location Permitting) for most shipments, and there is no upfront payment until you choose a carrier. Pricing varies based on distance, vehicle size, season, route demand, and the type of trailer selected.
Get your free, no-obligation quote today.
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