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Old 10-18-2011, 02:56 PM
 
2 posts, read 3,847 times
Reputation: 10

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Hello.

I'm trying to find out what is included in the "state sales tax" that can be deductible on IRS 1040 form schedule A.

The Illinois sales tax (9.5%) that they charged for my car lease is pretty obvious (it should be deductible).

But what about the 8% "city use tax" that I was also charged. Is that also tax deductible along with all my state sales taxes on Schedule A should I decide to use "state sales taxes" instead of "state income taxes" for the Schedule A deduction.

They were both charged when the lease started and were rolled into the lease costs.

Anyone?

Thanks!
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Old 10-18-2011, 03:33 PM
 
Location: River North, Chicago, Illinois
4,369 posts, read 6,259,821 times
Reputation: 5817
Quote:
Originally Posted by jivefive99 View Post
Hello.

I'm trying to find out what is included in the "state sales tax" that can be deductible on IRS 1040 form schedule A.

The Illinois sales tax (9.5%) that they charged for my car lease is pretty obvious (it should be deductible).

But what about the 8% "city use tax" that I was also charged. Is that also tax deductible along with all my state sales taxes on Schedule A should I decide to use "state sales taxes" instead of "state income taxes" for the Schedule A deduction.

They were both charged when the lease started and were rolled into the lease costs.

Anyone?

Thanks!
AFAIK, that "city use tax" isn't considered a sales tax, so it may not be deductible.

This page mentions that for "specified items" you can only deduct taxes on automobiles as (paraphrasing) the lesser of the actual tax or what the rate would have been with the general sales tax. So you could probably get away with deducting 9.75% if you live in Chicago, since that's what the Chicago general sales tax it, but not 17.5%.
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Old 10-18-2011, 03:43 PM
 
Location: Skokiewood
732 posts, read 2,577,677 times
Reputation: 657
It's not a use tax. It's technically a lease transaction tax in the municipal code.

It's also likely not a deductible sales tax for federal income tax purposes. To be a deductible sales tax, it has to be a "general sales tax", which is defined as a tax imposed at one rate with respect to the sale at retail of a broad range of classes of items.
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Old 10-20-2011, 06:54 AM
 
2 posts, read 3,847 times
Reputation: 10
Thanks!
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