Actually, that option is available to ALL taxpayers in ALL states who
itemize deductions. A taxpayer can choose to deduct either state and local
income taxes paid OR sales taxes paid. Obviously, for those who live in
states which do not assess income taxes, this is a no-brainer -- it's a new
extra deduction.

The law states that a taxpayer may deduct actual sales taxes paid during the
year as evidenced by records and receipts, or the taxpayer may choose to use
an estimated amount taken from an IRS table based upon family size and
income.

This law change came into being as of October 23, 2004, when the American
Jobs Creation Act was enacted. Since this enactment was late in the year,
many taxpayers won't have sales tax receipts from before October 23, 2004
(or before becoming aware of the law change), and will consequently use the
table to determine the maximum deduction allowable.

For states that assess a sales tax on a car or boat purchase, this sales tax
amount is something that would figure into the total when adding up sales
tax amounts from retained receipts. But extra good news is the fact that
sales taxes on the purchase of a car and/or a boat can be ADDED to the
amount from the IRS table to maximize the deduction.

Even if you pay state income tax, it would worth your while to determine
your sales tax deduction -- the amount may be larger than the amount of
state income taxes you pay and therefore lower your tax bill. If your state
has no income tax, congratulations on your new, EXTRA deduction!

If you bought a Corvette (or other car(s) or boat(s)) during 2004 and paid
sales taxes on the purchase, this new law provision could save you some
bucks on your taxes.

Happy, less-taxing motoring in your 'Vette!

David
2000 Coupe, Millennium Yellow

"Scubabix" > wrote in message
...
>I just received some good news from my accountant. There is a new
>allowance in the Tax code for people living in states that do not have a
>state income tax. It allows a deduction for sales taxes paid.
>Particularly large item purchases. Say, like a car, like a Corvette?
>Check with your tax preparer for details.
>
> Rob
> 78 & 96 Coupes (Red of course)
>