Publication 600: Optional State Sales Tax Tables; Introductory Material

This is archived information that pertains only to the 2004 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Purpose

We are providing this publication so you can figure your deduction for state and local general sales taxes using the Optional State Sales Tax Tables. A general sales tax is a sales tax imposed at one rate with respect to the retail sale of a broad range of classes of items. In addition, certain selective sales taxes (sales taxes imposed at a different rate on certain selected items) are deductible as general sales taxes, as explained below.

Introduction

New for 2004, you can elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction on Schedule A (Form 1040). You cannot deduct both. Generally, to figure your state and local general sales tax deduction, you can use either your actual expenses or the Optional State Sales Tax Tables contained in this publication.

Actual expenses. Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2004 only if the tax rate was the same as the general sales tax rate. Do not include sales taxes paid on items used in your trade or business.

Rate less than general rate. Sales taxes on food, clothing, medical supplies, and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate.

Rate more than general rate. Sales taxes on motor vehicles also are deductible as a general sales tax if the tax rate was more than the general sales tax rate, but the tax is deductible only up to the amount of tax that would have been imposed at the general sales tax rate. Motor vehicles include:

Cars,
Motorcycles,
Motor homes,
Recreational vehicles,
Sport utility vehicles,
Trucks,
Vans, and
Off-road vehicles.

Also include any state and local general sales taxes paid for a leased motor vehicle.

You must keep your actual receipts showing general sales taxes paid to use this method.

Optional State Sales Tax Tables. Instead of using your actual expenses, you can use the Optional State Sales Tax Tables on pages 3 through 5 to figure your state and local general sales tax deduction. You may also be able to add the following items to the table amount.

Local general sales taxes if your locality imposes a general sales tax.
State and local general sales taxes paid on certain specified items.

Previous | First | Next

Publications Index | 2004 Tax Help Archives | Tax Help Archives Main | Home