You can claim the sales tax on your 8!!

The US Gov is allowing us to claim either state/local sales taxes instead of state/local income taxes for the 2004 return. Check it out at www.irs.gov.

Now 8 owners can get a little extra cash in their pockets come April!

:confused: Hmmm....we pay no state income tax here in TX - pay a helluvalot of property and sales taxes though!

Sweet gift from our president. Another way to reward the red states and encourage spending at the same time. Genius!

:confused: Hmmm....we pay no state income tax here in TX - That's the beauty of it! :D

Most if not all of the 8 states with no state income tax happen to be red states.

From IRS site:

Taxpayers also may add to the table amount any sales taxes paid on:

A motor vehicle, but only up to the amount of tax paid at the general sales tax rate; and
An aircraft, boat, home (including mobile or prefabricated), or home building materials, if the tax rate is the same as the general sales tax rate.

While this deduction will mainly benefit taxpayers with a state or local sales tax but no income tax – in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming – it may give a larger deduction to any taxpayer who paid more in sales taxes than income taxes. For example, a person may have bought a new car, boosting the sales tax total, or claimed tax credits, lowering the state income tax paid.


Well I knew there was a reason I bought 2 brand new autos this year ;)

Ok, I bought my 8 January 1st, 2004, and I bought my new house in July.....and I also live in Texas....will I benefit from this? (I am a complete idiot when it comes to taxes)

Ok, I bought my 8 January 1st, 2004, and I bought my new house in July.....and I also live in Texas....will I benefit from this? (I am a complete idiot when it comes to taxes)

I second the idiot comment. Me, not you :) I too live in TX and bought my 8 Feb. '04. Will this come to be an advantage for me. And if so, how would one file this come tax time. I do mine online with taxslayer cause it is extremely simple and free for Active Duty Military...

That's the beauty of it! :D

Most if not all of the 8 states with no state income tax happen to be red states.


Quite true- all of the states with social programs like supplemental Medicare are blue- in New Yrok, that means 8.25% on your car purchase.

Back in the early 80's this was a legal deduction, but was ended in 1987 when the tax rates were lowered again.

Now I'm not an accountant, but I don't see why ya'll wouldn't benefit from this tax break. I think the "general tax rate" differs for each person (based on your income) but either way it's another opportunity for more money in your pocket. As far as I know, there's no limit as to what you can claim (ex: you can claim a car, boat and house if all were purchased in 2004). You'll need copies of your receipts in order to file this exemption. I don't know how it would work if you did it online... I usually do that too, but I don't want to screw it up so I'm willing to spend $50 and go to H&R Block. You can claim small stuff like clothes and groceries, but not many of us have kept those receipts all year long. (Has anyone done this?) Some other big-ticket items ya'll may not have thought of: airline tickets and large electronics. As long as you have the receipt, you'll be raking inthe dough.

Sweet gift from our president. Another way to reward the red states and encourage spending at the same time. Genius!


umm this rewards all of us (which is great i guess) not just red states, last time i checked this was the united states of america, not the divided states of red and blue

btw last time i checked we dont deserve any money back, country is drowning in debt. ill still take it gladly because im a consumer whore and an accountant so i love minimizing my taxes

Now I'm not an accountant, but I don't see why ya'll wouldn't benefit from this tax break. I think the "general tax rate" differs for each person (based on your income) but either way it's another opportunity for more money in your pocket. As far as I know, there's no limit as to what you can claim (ex: you can claim a car, boat and house if all were purchased in 2004). You'll need copies of your receipts in order to file this exemption. I don't know how it would work if you did it online... I usually do that too, but I don't want to screw it up so I'm willing to spend $50 and go to H&R Block. You can claim small stuff like clothes and groceries, but not many of us have kept those receipts all year long. (Has anyone done this?) Some other big-ticket items ya'll may not have thought of: airline tickets and large electronics. As long as you have the receipt, you'll be raking inthe dough.


the tax code is ever changing and you have to be careful as to what you deducted...for instance in 2002 the tax code changed to make capital lease payments on an automobile no longer deductible...i was doing taxes for a friend of mine and he got terribly pissed about that. BTW you can claim whatever amount of taxes due to the IRS that you want (if you want to claim a 5000 dollar refund when you are entitled to 500, you can do this). However if the IRS audits you and you are incorrect thats fraud (and imho a treasonous offense the country is short on cash not paying taxes hurts america).

Am I reading this wrong? The way I see it, the only way it would work to anyones advantage is if they paid less State tax out of your paychecks then sales tax. I don't think my 8's sales tax was higher than I paid to the state. Someone correct me if i'm wrong here. I would love to see more money back this year on taxes.

Am I reading this wrong? The way I see it, the only way it would work to anyones advantage is if they paid less State tax out of your paychecks then sales tax. I don't think my 8's sales tax was higher than I paid to the state. Someone correct me if i'm wrong here. I would love to see more money back this year on taxes.

i am going to take a look at this tomorrow with a clear head and see whether or not there is any way to use this for a refund in states with an income tax. My gut feeling is that at best the difference in total sales tax spent over the year greater than your state income tax may be tax deductible (e.g. PA state income tax is 2.8% sales tax is 6% i made 50000 so i paid 1400 in state income tax, i spent 30000 on goods during the year so i paid 1800 in sales tax (if audited this amount of spending must be proven)....so 400 dollars may be tax deductible on a federal level) again ill read the code tomorrow but thats how im understanding it.

Am I reading this wrong? The way I see it, the only way it would work to anyones advantage is if they paid less State tax out of your paychecks then sales tax.Or if you live in a state with no state income tax. Those are the primary beneficiaries. It would be difficult to collect enough documentation of sales tax to exceed the state income tax deduction for most people.

This deductuion is about useless for most, figure in the state local real estate taxes you pay??? no comparison:(

This deductuion is about useless for most, figure in the state local real estate taxes you pay??? no comparison:(
Those get added to the sales tax deduction. But you have to itemize.

Motion for a tax guy to come out from the woodwork and help out members of this forum pro-bono and just the gratification of helping other 8 members. Anyone?