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Happy Tax Day! It’s been a rather rough day for a lot of us, even if you don’t live anywhere near Boston. The bombing was horrible and tragic. Today was also tax day, and as I was watching the news and (finally) filing my taxes, I found something interesting.

 

This wonderful bit of information was on my online tax preparation service website:

 

 

State and local general sales tax can be deducted instead of actual state and local income taxes paid. Generally, this deduction will benefit taxpayers in states that impose a state or local sales tax but state or local tax is not withheld from income. States that do not have income tax are Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee limit their state income tax to only interest and dividend income. You may also benefit by using the general sales tax deduction if you had a large amount of purchases including a motor vehicle, boat, aircraft, or major home renovation. The amount of tax allowed for the purchases is limited to the general sales tax rate.

So there you go. Looking for a place to move? There’s your income tax-free states all lined up! Not ready for that extreme form of liberty? Then try New Hampshire or Tennessee for the lite version.

On a side note, it’s pretty ridiculous that you can’t deduct ALL the taxes you pay from your income. Yet another reason why our tax code needs changing (how about making all states income tax-free, for a start?)

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