sales tax rate (Houston, Dallas, Sugar Land: crime, new home, neighborhood)

[maddysammy]

We are in the process of buying(building) a new home in Katy and we were discussing sale tax rates and she said that because we are in ft bend county its 6.25 but down the road in "Katy (harris) its 8.25" so confusing to me... but she said that sales tax is tax deductable in Texas to keep your receipts. Has anyone ever heard that? Is it true? It doesnt sound right.. I'm going to do my research on this but was wodering what you think? TIA

[momof2dfw]

The min. state sales tax is 6.25. Every jurisdiction can raise it to the highest level which I thought was 8.25% depending on several things. One of the reasons a city may have a higher sales tax rate is some of those sales tax dollars go to help support mass transit. In the Dallas area we have DART and the cities that are part of DART have a higher percentage sales tax by .25%. So yes, the sales tax in different counties and cities can be different. As for the income tax write off yes that is true. It only started a few years ago but we can now write off our sales tax. You can either use your receipts or the formula offered.

[KerrTown]

Actually in Fort Bend County the sales tax is 7.25 %. On the Harris side it is 8.25 %. The SuperTarget charges 7.25 % while the Target charges 8.25 %.

There is a map on the COH website showing their sales tax territory as a result of annexing powers. The last time I saw it, the shaded areas defining their territory to collect sales tax was the shopping centers along I-10 and down Mason Road, up and down Fry Road, and halfway down the Grand Parkway. Because of this I only shop at that SuperTarget only and shop at other stores located there since I don't see how the 1 % extra sales tax that I pay in Houston will contribute to my neighborhood, Cinco Ranch. I will only shop in Houston if the store does not have a Cinco Ranch location outside of Houston's tax zones.

In Texas, up to 2 % can be collected by numerous taxing authorities. If I remember correctly from an explanation years ago that in Houston 1 % is collected by the COH and another 1% for METRO (bus service). It used to be in First Colony Mall in Sugar Land when it opened in 1996, the tax was 7.25 %. Somehow it increased to its present 8.25 % recently for some reason. Maybe Sugar Land was added to Metro or they needed extra income?

Personally, 10 % sales tax is the maximum I can stand without a state income tax since it is very easy to calculate in base-10. Anything over 10 % signals a need for a state income tax.

[maddysammy]

Wow that amazes me that you can right off your sales tax.. What other state does that? Florida doesn't..I can't imagine keeping all my recipets.. unless instead of a penny jar(we have one about 3 ft high) you make it a reciept jar lol...

[nooneknowsmyname]

Originally Posted by maddysammy

Wow that amazes me that you can right off your sales tax.. What other state does that? Florida doesn't..I can't imagine keeping all my recipets.. unless instead of a penny jar(we have one about 3 ft high) you make it a reciept jar lol...

Anyone who pays sales tax and not state income tax--this includes Florida and Texas--can deduct sales tax, entering it on Schedule A (Itemized Deductions) of the Federal Income Tax return. As someone wrote in an earlier this post, this began a few years ago. Before this change, individuals who resided in states where people paid sales tax could not deduct this from their Federal Income Tax Return (Schedule A, Itemized Deductions) but since the change went into effect they can. If a person lives in a state where individuals pay both state income tax and sales tax, like California where I live, they have a choice and can deduct either sales tax or income tax, but not both. And, of course, most people deduct the larger of the two. Anyone who hasn't taken advantage of this should start ASAP as there is still time to do so for the 06 income tax filing period.

[ShenandoahValley]

nonone... gave good advice. Contact a tax specialist because every persons situation is not the same.

[nooneknowsmyname]

Originally Posted by ShenandoahValley

nonone... gave good advice. Contact a tax specialist because every persons situation is not the same.

Thanks ShenandoahValley. However, while it is a good idea to consult a tax specialist if one feels the need to do so, it isn't required to take advantage of the sales tax deduction. What is important when deciding whether to itemize deductions (where one could deduct sales tax or state income tax) is to ascertain whether one benefits more from the standard deduction or from itemizing. As far as using or consulting a tax specialist, I have never done that and I have a very complicated tax situation and return. Instead, I have educated myself about the tax code and now that computer applications are available for preparing tax returns, I find it much easier to prepare my taxes than it was in the past. I haven't felt the need to consult a tax specialist because I haven't wanted to spend the money and have been able to figure out how to do my taxes without one. Of course, that doesn't mean that others shouldn't consult a tax specialist if they feel they need one.

I've posted 3 links from the website where one can go to get more information about deducting sales tax from federal income tax return.

http://www.bankrate.com/brm/itax/20041012b1.asp

http://www.nysscpa.org/cpajournal/20...ntials/p51.htm

http://www.quizlaw.com/federal_incom..._sales_tax.php

[Turk]

Not trying to get into politics, but with the democrat controlled legislative body, we may lose the option to deduct sales tax soon. They are going to let many of Bush's tax cuts expire, and states with sales tax will be paying a higher burden than any other state with a state income tax. I wish i had the source of where I read that a few days ago...

Sales tax can still be higher than 8.25, just FYI. With the base state rate, ESDs, MUDs, crime prevention districts, Cities, and other district like that can use collect sales tax. You won't find many places higher than 8.25 though...

[nooneknowsmyname]

Originally Posted by Turk

Not trying to get into politics, but with the democrat controlled legislative body, we may lose the option to deduct sales tax soon. They are going to let many of Bush's tax cuts expire, and states with sales tax will be paying a higher burden than any other state with a state income tax. I wish i had the source of where I read that a few days ago...

Sales tax can still be higher than 8.25, just FYI. With the base state rate, ESDs, MUDs, crime prevention districts, Cities, and other district like that can use collect sales tax. You won't find many places higher than 8.25 though...

While the option to deduct sales tax will expire unless it is extended, my purpose was not go delve into the political issues of the situation. My only purpose was to make the person aware that state sales tax have been deductible for a couple of years and that it wasn't too late to deduct state sales tax from her/his 2006 federal tax return if s/he hadn't already completed and mailed it in. As far as politics are concerned, while I have exceptionally strong political beliefs, I kept/ will keep them to myself because my purpose in providing the information about deducting state taxes was purely informational not political.

While some Texas jurisdictions may seem to have a high sales tax, at a maximum of 8.25, it is less than the state/local sales tax amount compared to the California counties where I reside and shop. In both of these California counties--Contra Costa and Alameda--the sales tax rate is between 8.250 %--8.750, the variation due to the fact that incorporated cities can levy an additional tax on top of the county tax.

In addition to high sales tax, California also has a state income tax, which is quite steep. For example, if a person's income range is between $31,925 and $40,345, the tax rate on every dollar of income earned is 8%. If a person's income range is $40,346 and over, the tax rate on every dollar of income earned is 9.3%.

Admittedly, while property taxes increases are capped by Proposition 13, one only gains if the house was purchased before the housing prices exploded. With a median price of 550,000-619,000 in the SF Bay area depending on the actual location, however, the amount of property tax paid by people who have only recently purchased their homes is quite high.

And currently, the cheapest gas that can be found in the SF Bay Area is 3.15 per gallon, much of the cost due to the high tax on gas.

Given the relatively high tax burden in California, it isn't clear whether eliminating the sales tax as a deduction on federal income tax return will automatically result in a greater burden for people who reside in states that only pay sales tax and not state income tax. What matters is the overall tax burden levied on individuals who reside in a particular state.

CNN Money had an article on the most tax friendly states and cities.
The link to the story is <http://money.cnn.com/2002/01/28/taxes/q_taxfriendly/index.htm>
Contained within the story and other links that provide information about the relative tax burden of individual states.

[mamafor2]

This may help you guys...

Here's the link: City Sales and Use Tax Rates

Originally Posted by maddysammy

We are in the process of buying(building) a new home in Katy and we were discussing sale tax rates and she said that because we are in ft bend county its 6.25 but down the road in "Katy (harris) its 8.25" so confusing to me... but she said that sales tax is tax deductable in Texas to keep your receipts. Has anyone ever heard that? Is it true? It doesnt sound right.. I'm going to do my research on this but was wodering what you think? TIA