Deduct sales tax ?

[Wee One]

When you buy or sell a house there are many items in the closing costs that are deductable. You, however, do not have sales tax on a house. I have seen many posts that talk about deducting the interest on a MoHo as mortgage interest. If the interest on a MoHo is mortgage interest, then shouldn't the sales tax be considered a closing cost?

Has anyone tried to take a deduction? Has anyone asked their tax advisor about this?

I will ask my tax consultant next time I talk to him (sometime before (4/15/04).

[Rick A]

Sales tax is administered by the state, not the IRS. I have never heard of deducting the sales tax, and it would probably raise some flags if you did.

2001 Dodge Ram Quad Cab 1500 LB 2x4

2002 Rockwood M2710 Ultralight 5th Wheel

[Workers On The Go]

Sales tax is deducted when you "itemize your deductions." It isn't a closing cost. It can only be taken for the year you purchase the vehicle.

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> Has anyone tried to take a deduction? Has anyone asked their tax advisor about this?
<HR></BLOCKQUOTE>

If you have someone who prepares your taxes for you then that is the best person to ask.

See who I am:

http://pages.ivillage.com/workersonthego/

[ralphie]

There are special rules for deducting closing costs on conventional homes that do not apply to the MH. We haven't been able to itemize sales taxes on fed returns for several years now, regardless, the only deduction you can take on the MH is for the yearly interest, as you can on a home. There are different rules if you're using the MH for business.

[agkcpa]

I thought that I would bring this to the top because the rules have changed since this discussion. Sales tax is now deductible again (including sales tax on an RV). You can deduct EITHER Sales Tax or State Income Tax, but not both.

[brad03ca]

You all have it so much better than in Canada. Tax write offs in Canada for such things as sales tax, closing costs,mortgage interest etc. just don't happen here. When I hear of what you can deduct, I get very green with envy.
Canada's population, roughly the same as the state of California, means there are far fewer people to carry our tax burden, therefore less tax deductions.

[Gary RVRoamer]

Yes, sales taxes can be itemized on the federal return for tax year 2005. Could be good news if you purchased an expensive RV, including truck & trailer.Here's the overview from the IRS
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FS-2006-9, January 2006

Under the American Jobs Creation Act of 2004, taxpayers who itemize their deductions have the option of claiming either state and local income taxes or state and local general sales taxes. Taxpayers will indicate by a checkbox on line 5 of Schedule A which type of tax they're claiming. Tax Year 2005 is the last year that the law allows taxpayers the option to deduct state and local general sales taxes, although pending legislation may extend this option to future years.

Generally, taxpayers can deduct the actual state and local general sales taxes (including compensating use taxes) paid in 2005 if the tax rate was the same as the general sales tax rate. However, sales taxes on food, clothing, medical supplies and motor vehicles are deductible as a general sales tax even if the tax rate was less than the general sales tax rate. Sales taxes on motor vehicles are also deductible as a general sales tax if the tax rate was more than the general sales tax rate, but the tax is deductible only up to the amount of the tax that would have been imposed at the general sales tax rate.

More at 2005 - Deduct sales tax
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[Ray,IN]

Talked with my accountant yesterday. Sales tax may be deducted only if you file an itemized tax form. You must be able to itemize more than the standard $10,000 deduction for a married couple first. I got my hopes up for nothing, oh well.

[ruppr]

Ray,
The normal amount for a sizable motorhome is $4-5000 dollars alone. Most accountants have no problem with legitimate deductions of 10,000 plus for a married couple. You are right about a itemized form.

Best,

[rebelsbeach]

Sales tax on vehicles in Virginia is 3% of the purchase price,irregardless of the trade-in difference.

I'm getting all "greased up" as I will take delivery around the end of the month...

[Hitchhiker]

Quote:

Sales tax on vehicles in Virginia is 3% of the purchase price,irregardless of the trade-in difference.

Egad, most states only charge tax on the net amount.

Here in NC it's 3% of the amount after the trade is subtracted.

[rebelsbeach]

Went to the Virginia DMV site to confirm....

For the purposes of the Motor Vehicle Sales and Use Tax collection, gross sales price includes the dealer processing fee. The gross sales price is the vehicle price after the manufacturers' discounts or dealer price discounts. Gross sales price does not include any other price reductions, such as credit for trade-ins, rebates, unpaid liens or other unpaid credits.

[glfprncs]

You all need to be residents of South Carolina. Here, there is a flat $300 sales tax for vehicles, RV or otherwise. However, we have to pay a yearly 'personal property tax' on our vehicle, which is where the state screws you. It is, however, tax deductable, and if you own an RV that, like ours, is over 10 years old, the property taxes are quite reasonable (we pay about $340 per year for our tags).

[David K]

South Carolina is much better than Georgia. Just paid the sales tax on the 2002 Winnebago Ultimate Advantage I bought and it was $6,543.00 and the license tag for the year was $756.00. Guess I need to look at moving to SC.