Code Section 164
| Code Section | Effective Date | Name of Act | Name of Provision | 10yr Revenue Estimate ($millions) |
|---|---|---|---|---|
| 164 | 12/31/2011 | The American Taxpayer Relief Act of 2012 | Deduction for State and local sales taxes | -5,538 |
| 164 | 12/31/2009 | The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 | Deduction of State and local sales taxes | -5,536 |
| 63 and 164 | Between 2/17/2009 and 1/1/2010 | The American Recovery and Reinvestment Act of 2009 (Public Law 111-5) | Deduction for State sales tax and excise tax on the purchase of qualified motor vehicles | -1,684 |
Deduction for State and local sales taxes
Explanation of Provision
The provision allowing taxpayers to elect to deduct State and local sales taxes in lieu of State and local income taxes is extended for two years, through 2013.
Deduction of State and local sales taxes
Explanation of Provision
The provision allowing taxpayers to elect to deduct State and local sales taxes in lieu of State and local income taxes is extended for two years (through December 31, 2011).
Deduction for State sales tax and excise tax on the purchase of qualified motor vehicles
Explanation of Provision
The Act provides a deduction for qualified motor vehicle taxes. It expands the definition of taxes allowed as a deduction to include qualified motor vehicle taxes paid or accrued within the taxable year. A taxpayer who itemizes and makes an election to deduct State and local sales taxes, including for qualified motor vehicles, in lieu of State and local income taxes for the taxable year shall not be allowed an additional deduction for qualified motor vehicle taxes. A taxpayer who does not itemize deductions is allowed an increased standard deduction for qualified motor vehicle taxes.
Qualified motor vehicle taxes include any State or local sales or excise tax imposed on the purchase of a qualified motor vehicle. A qualified motor vehicle means a passenger automobile, light truck, or motorcycle which has a gross vehicle weight rating of not more than 8,500 pounds, or a motor home acquired for use by the taxpayer after the date of enactment and before January 1, 2010, the original use of which commences with the taxpayer.
The deduction is limited to the tax on up to $49,500 of the purchase price of a qualified motor vehicle. The deduction is phased out for taxpayers with modified adjusted gross income between $125,000 and $135,000 ($250,000 and $260,000 in the case of a joint return).