The following are other taxes you can deduct if you incur them in
the ordinary course of your trade or business.
Excise taxes.
You can deduct as a business expense all excise taxes that are
ordinary and necessary expenses of carrying on your trade or business.
However, see Fuel taxes, later.
Franchise taxes.
You can deduct corporate franchise taxes as a business expense.
Fuel taxes.
Taxes on gasoline, diesel fuel, and other motor fuels that you use
in your business are usually included as part of the cost of the fuel.
Do not deduct these taxes as a separate item.
You may be entitled to a credit or refund for federal excise tax
you paid on fuels used for certain purposes. For more information, see
Publication 378.
Occupational taxes.
You can deduct as a business expense an occupational tax charged at
a flat rate by a locality for the privilege of working or conducting a
business in the locality.
Personal property tax.
You can deduct any tax imposed by a state or local government on
personal property used in your trade or business.
Sales tax.
Treat any sales tax you pay on a service or on the purchase or use
of property as part of the cost of the service or property. If the
service or the cost or use of the property is a deductible business
expense, you can deduct the tax as part of that service or cost. If
the property is merchandise bought for resale, the sales tax is part
of the cost of the merchandise. If the property is depreciable, add
the sales tax to the basis for depreciation. For more information on
basis, see Publication 551.
Do not deduct state and local sales taxes imposed on the buyer that
you must collect and pay over to the state or local government. Do not
include these taxes in gross receipts or sales.
Self-employment tax.
You can deduct one-half of your self-employment tax as a business
expense in figuring your adjusted gross income. This deduction only
affects your income tax. It does not affect your net earnings from
self-employment or your self-employment tax.
To deduct the tax, enter on Form 1040, line 27, the amount shown on
the "Deduction for one-half of self-employment tax" line of
Schedule SE (Form 1040).
For more information on self-employment tax, see Publication 533.
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