[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.164-5]

[Page 850]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
COMPUTATION OF TAXABLE INCOME--Table of Contents
 
Sec. 1.164-5  Certain retail sales taxes and gasoline taxes.

    For taxable years beginning before January 1, 1964, any amount 
representing a State or local sales tax paid by a consumer of services 
or tangible personal property is deductible by such consumer as a tax, 
provided it is separately stated and not paid in connection with his 
trade or business. For taxable years beginning after December 31, 1963, 
only the amount of any separately stated State and local general sales 
tax (as defined in paragraph (g) of Sec. 1.164-3) and tax on the sale of 
gasoline, diesel fuel or other motor fuel paid by the consumer (other 
than in connection with his trade or business) is deductible by the 
consumer as tax. The fact that, under the law imposing it, the incidence 
of such State or local tax does not fall on the consumer is immaterial. 
The requirement that the amount of tax must be separately stated will be 
deemed complied with where it clearly appears that at the time of sale 
to the consumer, the tax was added to the sales price and collected or 
charged as a separate item. It is not necessary, for the purpose of this 
section, that the consumer be furnished with a sales slip, bill, 
invoice, or other statement on which the tax is separately stated. For 
example, where the law imposing the State or local tax for which the 
taxpayer seeks a deduction contains a prohibition against the seller 
absorbing the tax, or a provision requiring a posted notice stating that 
the tax will be added to the quoted price, or a requirement that the tax 
be separately shown in advertisements or separately stated on all bills 
and invoices, it is presumed that the amount of the State or local tax 
was separately stated at the time paid by the consumer; except that such 
presumption shall have no application to a tax on the sale of gasoline, 
diesel fuel or other motor fuel imposed upon a wholesaler unless such 
provisions of law apply with respect to both the sale at wholesale and 
the sale at retail.

[T.D. 6780, 29 FR 18147, Dec. 22, 1964]