in the past few years, citizens of states without state income tax have been allowed to deduct sales tax from their federal income tax. Most people use the IRS determined estimate of how much sales tax they paid. If you have a major purchase, such as a car, you can ADD that purchase's sales tax to the esitmated sales tax. The estimate is based on your local sales tax.

My question is, if you had a major expense in another state that included sales tax can you ADD that sales tax to your estimated paid sales tax? Also, who ultimatly determines what a "major" pruchase is? If I buy a $10,000 piece of art in California, can I add that sales tax to my IRS estiamted?

yes. Sales tax is Sales tax no matter where its paid. the IRS will allow you to deduct it as long as long as you live in one of those states that its allowed.

ok, then is a $13,000 single purchase in another state a "major purchase" under their terms?

yes

thanks.

anytime .. you can verify too. ive done it with a boat purchase from out of state and it was just fine. speaking of which its about that time again.

I also have a $4000 item I paid tax on in another country.

Value Added Tax?

Yeah I was wondering if it was VAT tax that you paid? If you have your receipts then you can file for recovery at the airport when you fly out of that country. Was this a business or personal purchase? If you are trying to recover a VAT tax then if it is personal then you can only claim on good purchased but if for business you can claim for goods and services. I think the only way to claim a VAT refund if you have left the country already is to get a company that does the refund for you but they charge a percentage. This is all from memory since my mother was the ambassador of goodwill to great britain 30 years ago and I use to know this info very well back then.

OK. My wife and I bought a brand new car in Florida in April. We also bought a car here in Texas in October. I can deduct the sales tax from both purchases on my taxes, added with another arbitrary amount of how much they think I may have paid in sales tax? Did I get that right?

I had no idea. Thanks Hedge!

you only get to deduct sales tax that is actually paid not would have been paid.

You might want to check with a tax expert or instructions for Schedule A. The intructions say "State and Local General Tax" . I'm pretty sure you could only deduct sales tax from a state you lived in.

For the "Major purchase" part, last year I bought about $5,000 worth of paintings, and when I researched it, art, no matter the amount spent, was not considered a major purchase, but since I had already spent more in individual sales taxes, I just added it to my everyday receipts (which I save) to give me 40% more of a deduction than what the tables suggested. But since you bought it out of state, you might want to consider talking to a tax expert.

The following was the definition for 2006 from the IRS for "major purchase":

"General Sales Tax You Paid on Specified Additional Items

Enter in the box provided any state and local general sales taxes paid on the following specified items. If you moved during the year, include the total for the year in that box.

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, include only the amount of tax you would have paid at the general sales tax rate.
An aircraft or boat, if the tax rate was the same as the general sales tax rate.
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.
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.
You purchased the materials to build a home or substantial addition or to perform a major renovation and paid the sales tax directly.
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. "

the link is a pop up from the online calculator.