Gross Receipts Taxes deductible?

I have another post up about a personal situation I'm having with Gross Receipts Taxes and that got me thinking about GRT in general.

Are GRT taxes paid by a consumer deductible on a personal Federal return as sales taxes are?

GRT, theoretically, is a tax on the seller, not the purchaser. Technically New Mexicans don't pay sales tax.

========================================= MODERATOR'S COMMENT: Please make it more obvious next time that you are asking about NM taxes. Thank you

Reply to
Grip
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Yes, the amount of GRT paid by a consumer counts as sales taxes for purposes of Form 1040 Schedule A or if you met the requirement for the new car purchase in 2009, you could have added the GRT (3% of purchase price) you paid on the qualifying vehicle to the standard deduction if you didn't itemize.

Reply to
Alan

Alan wrote in news:ia4vgf$b4g$ snipped-for-privacy@news.eternal- september.org:

Here in Hawaii, I think the rule is that if you elect to deduct "sales tax" (though the Individual Income Tax is plenty high) you can deduct the Gross Excise Tax, provided it is itemized on a receipt or other evidence of sale. Sellers are not required to break out the portion of a sales price that represents the GET, but retail and many service providers do I suppose for competitive reasons (advertised prices typically do not include the GET). The state awarded a contract to a company to ferret out GET non-filers for a percentage of the take and has been successful at getting some returns that way. A few have been referred for criminal charges (seeme like real estate agents' commissions have been fertile ground among others).

Also, the GET is not "theoretically" a tax on seller, it literally is. This has been an issue in Hawaii as the gov't was trying to advance a legal theory that sellers had a "trust" repsonsibility for amounts of GET. That theory hasn't been tried out in a court yet as I suspect the state realizes it is a stretch.

scott s. ..

Reply to
scott s.

| Here in Hawaii, I think the rule is that if you elect to deduct "sales | tax" (though the Individual Income Tax is plenty high) you can deduct | the Gross Excise Tax, provided it is itemized on a receipt or other | evidence of sale. Sellers are not required to break out the portion | of a sales price that represents the GET, but retail and many service | providers do I suppose for competitive reasons (advertised prices | typically do not include the GET). The state awarded a contract to | a company to ferret out GET non-filers for a percentage of the take | and has been successful at getting some returns that way. A few have | been referred for criminal charges (seeme like real estate agents' | commissions have been fertile ground among others). | | Also, the GET is not "theoretically" a tax on seller, it literally is.

Does the GET apply to interstate transactions?

Dan Lanciani ddl@danlan.*com

Reply to
Dan Lanciani

ddl@danlan.*com (Dan Lanciani) wrote in news: snipped-for-privacy@news.IPSWITCH.COM:

Goods and services exported from Hawaii are exempt from GET. Goods and services imported are subject to the use tax, which I think works the same as in sales tax jurisdictions. Imported goods and services incorporated into goods intended for resale (wholesale) are not subject to use tax. Note that wholesale transactions in Hawaii are subject to GET, but at a reduced rate. This use tax exemption does not cover overhead, so for example using a mainland payroll service would result in a use tax liability.

scott s. ..

Reply to
scott s.

Unless you billed the GRT as part of your invoice to your client, in which case the net cost for your business would approximate zero, the CRT would be a business deduction on Schedule C, not a miscellaneous itemized deduction. Penalties due to late payment of course, wouldn't be deductible. It's similar to Use Tax, which you either deduct separately, or more properly, include in the cost of the item when you buy it, even though you pay it separately to the state or locality.

Reply to
Tom Healy CPA

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