Table of Contents
Generally, you can deduct the actual state and local general sales taxes (including compensating use taxes) you paid in 2006 if the tax rate was the same as the general sales tax rate. However, 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. If you paid sales tax on a motor vehicle at a rate higher than the general sales tax rate, you can deduct only the amount of tax that you would have paid at the general sales tax rate on that vehicle. 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. Do not include sales taxes paid on items used in your trade or business.
To deduct your actual expenses, enter the amount on Schedule A, line 5, and enter “ST” on the dotted line to the left of the line 5 entry space.
You must keep your actual receipts showing general sales taxes paid to use this method.
Instead of using your actual expenses, you can use the tables on pages 5 through 7 to figure your state and local general sales tax deduction. You may also be able to add the state and local general sales taxes paid on certain specified items.
To figure your state and local general sales tax deduction using the tables, complete the worksheet below.
If your filing status is married filing separately, both you and your spouse elect to deduct sales taxes, and your spouse elects to use the optional sales tax tables, you also must use the tables to figure your state and local general sales tax deduction.
Before you begin: See the instructions for line 1 on page 3 if:
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1. | Enter your state general sales taxes from the applicable table on page 5 or 6 (see page 3 of the instructions) | 1. | $ | ||||||||||
Next. If, for all of 2006, you lived only in Connecticut, the District of Columbia, Hawaii, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Rhode Island, Virginia, or West Virginia, skip lines 2 through 5, enter -0- on line 6, and go to line 7. Otherwise, go to line 2 | |||||||||||||
2. | Did you live in Alaska, Arizona, Arkansas (Texarkana only), California (Los Angeles County only), Colorado, Georgia, Illinois, Louisiana, New York State, or North Carolina in 2006? | ||||||||||||
No. Enter -0- | |||||||||||||
Yes. Enter your local general sales taxes from the applicable table on page 7 (see page 3 of the instructions) | 2. | $ | |||||||||||
3. | Did your locality impose a local general sales tax in 2006? Residents of California, Nevada, and Texarkana, Arkansas, see page 3 of the instructions | ||||||||||||
No. Skip lines 3 through 5, enter -0- on line 6, and go to line 7 | |||||||||||||
Yes. Enter your local general sales tax rate, but omit the percentage sign. For example, if your local general sales tax rate was 2.5%, enter 2.5. If your local general sales tax rate changed or you lived in more than one locality in the same state during 2006, see page 3 of the instructions. (If you do not know your local general sales tax rate, contact your local government.) | 3. | . | |||||||||||
4. | Did you enter -0- on line 2 above? | ||||||||||||
No. Skip lines 4 and 5 and go to line 6 | |||||||||||||
Yes. Enter your state general sales tax rate (shown in the table heading for your state), but omit the percentage sign. For example, if your state general sales tax rate is 6%, enter 6.0 | 4. | . | |||||||||||
5. | Divide line 3 by line 4. Enter the result as a decimal (rounded to at least three places) | 5. | . | ||||||||||
6. | Did you enter -0- on line 2 above? | ||||||||||||
No. Multiply line 2 by line 3 | 6. | $ | |||||||||||
Yes. Multiply line 1 by line 5. If you lived in more than one locality in the same state during 2006, see page 4 of the instructions | |||||||||||||
7. | Enter your state and local general sales taxes paid on specified items, if any (see page 4 of the instructions) | 7. | $ | ||||||||||
8. | Deduction for general sales taxes. Add lines 1, 6, and 7. Enter the result here and the total from all your state and local general sales tax deduction worksheets, if you completed more than one, on Schedule A, line 5. Be sure to enter “ST” on the dotted line to the left of the entry space | 8. | $ | ||||||||||
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Tax-exempt interest.
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Veterans' benefits.
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Nontaxable combat pay.
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Workers' compensation.
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Nontaxable part of social security and railroad retirement benefits.
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Nontaxable part of IRA, pension, or annuity distributions. Do not include rollovers.
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Public assistance payments.
Example.
You lived in State A from January 1 through August 31, 2006 (243 days), and in State B from September 1 through December 31, 2006 (122 days). The table amount for State A is $500. The table amount for State B is $400. You would figure your state general sales tax as follows.
State A: | $500 x 243/365 = | $333 | ||
State B: | $400 x 122/365 = | 134 | ||
Total | = | $467 |
If none of the localities in which you lived during 2006 imposed a local general sales tax, enter $467 on line 1 of your worksheet. Otherwise, complete a separate worksheet for State A and State B. Enter $333 on line 1 of the State A worksheet and $134 on line 1 of the State B worksheet.
Example.
You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). The table amount for Locality 1 is $100. The table amount for Locality 2 is $150. You would figure the amount to enter on line 2 as follows. Note that this amount may not equal your local sales tax deduction, which is figured on line 6 of the worksheet.
Locality 1: | $100 x 243/365 = | $67 | ||
Locality 2: | $150 x 122/365 = | 50 | ||
Total | = | $117 |
Example.
Locality 1 imposed a 1% local general sales tax from January 1 through September 30, 2006 (273 days). The rate increased to 1.75% for the period from October 1 through December 31, 2006 (92 days). You would enter “1.189” on line 3, figured as follows.
January 1 - September 30: | 1.00 x 273/365 = | 0.748 | ||
October 1 - December 31: | 1.75 x 92/365 = | 0.441 | ||
Total | = | 1.189 |
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Each locality did not have the same local general sales tax rate.
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You lived in Texarkana, AR, or Los Angeles County, CA.
Example.
You lived in Locality 1 from January 1 through August 31, 2006 (243 days), and in Locality 2 from September 1 through December 31, 2006 (122 days). The local general sales tax rate for Locality 1 is 1%. The rate for Locality 2 is 1.75%. You would enter “0.666” on line 3 for the Locality 1 worksheet and “0.585” for the Locality 2 worksheet, figured as follows.
Locality 1: | 1.00 x 243/365 = | 0.666 | ||
Locality 2: | 1.75 x 122/365 = | 0.585 |
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A motor vehicle (including a car, motorcycle, motor home, recreational vehicle, sport utility vehicle, truck, van, and off-road vehicle). Also include any state and local general sales taxes paid for a leased motor vehicle. If the state sales tax rate on these items is higher than the general sales tax rate, only include the amount of tax you would have paid at the general sales tax rate.
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An aircraft or boat, if the tax rate was the same as the general sales tax rate.
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A home (including a mobile home or prefabricated home) or substantial addition to or major renovation of a home, but only if the tax rate was the same as the general sales tax rate and any of the following applies.
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Your state or locality imposes a general sales tax directly on the sale of a home or on the cost of a substantial addition or major renovation.
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You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly.
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Under your state law, your contractor is considered your agent in the construction of the home or substantial addition or the performance of a major renovation. The contract must state that the contractor is authorized to act in your name and must follow your directions on construction decisions. In this case, you will be considered to have purchased any items subject to a sales tax and to have paid the sales tax directly.
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