The IRS has clarified what you may deduct in lieu of sales tax on your tax return.
Taxpayers in these states may deduct other fees or taxes imposed by state and/or local governments (purchase between February 17th and December 31st inclusive).
The qualifying fees or taxes must be assessed on the purchase, and based on the sales price or per unit fee. Congress intended these fees or taxes to qualify for this above-the-line deduction.
"This tax break is available for people purchasing a new car this year. That can include people in states without a sales tax,” said IRS Commissioner Doug Shulman. “This means more people can take advantage of this deduction when they file tax returns next year.”
The deduction is limited to fees or taxes paid on up to $49,500 purchase price for a qualified new car, light truck, motor home or motorcycle.
See the following link for more information:
http://www.irs.gov/newsroom/article/0,,id=206633,00.html
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