Sales tax deduction in Arizona
Varies
Is Sales Tax Deductible in Arizona?
Short answer: Only instead of income tax: itemizers in Arizona pick sales tax (5.6% state rate, about 8.54% with local taxes) or state income tax, whichever is bigger. Levies a transaction privilege tax (TPT) instead of a sales tax; groceries are exempt from the state portion, but some cities tax them, and some cities apply a lower tiered rate to the portion of a single item above a set price.
Use the IRS Sales Tax Deduction Calculator or your receipts, add sales tax paid on a car, boat, or home-building materials, and stay within the $40,400 SALT cap (Schedule A line 5a).
Records to keep: Keep your state return, W-2s and 1099s (1099-R, SSA-1099), and any state credit worksheets. Check your state revenue department's current-year instructions before you file.
Sales tax deduction in Arizona
Varies
Individuals / Personal Taxes
Only instead of income tax: itemizers in Arizona pick sales tax (5.6% state rate, about 8.54% with local taxes) or state income tax, whichever is bigger. Levies a transaction privilege tax (TPT) instead of a sales tax; groceries are exempt from the state portion, but some cities tax them, and some cities apply a lower tiered rate to the portion of a single item above a set price.
Business justification
Only instead of income tax: itemizers in Arizona pick sales tax (5.6% state rate, about 8.54% with local taxes) or state income tax, whichever is bigger. Levies a transaction privilege tax (TPT) instead of a sales tax; groceries are exempt from the state portion, but some cities tax them, and some cities apply a lower tiered rate to the portion of a single item above a set price. Use the IRS Sales Tax Deduction Calculator or your receipts, add sales tax paid on a car, boat, or home-building materials, and stay within the $40,400 SALT cap (Schedule A line 5a).
Category
- Personal Tax Deductions