Can I deduct state and federal taxes on gasoline on my return?

Question

Another scandal of the U.S. Govt. is the fact that taxes on gasoline (and tobacco, but I don' t smoke so I don't care) are imbedded in the price, so the consumer has no clue what they're paying the govt. when they purchase those goods. If the average citizen knew how much money the govt. was making on a tank of gas, there would be riots in the streets.

That being said, those are still taxes and should be able to be deducted on a return right? If not, then that money is being taxed twice (income and gas tax). If I can deduct the gas tax from my taxable income, where can I find the amount of tax per gallon I purchased? I have all my receipts, but there's no "tax" printed on the slip. Thanks.

State sales taxes can be deducted from your taxable income if you keep the receipts. Also, a large portion of the gasoline tax is Federal tax, so the Federal Govt. is taxing the same money twice regardless of the state tax.

Molly, how is my purchasing gasoline from a private company the same as paying for a "governmental service," as you put it? Exactly what service is the government providing there? According to the definitions you provided, the gas tax IS a tax. It is a "charge imposed on person or property by governmental authority to raise funds for the support of government or for public purposes." Unless some government lackey wants to pump my gas for me, there is NO government service being provided. Threfore it cannot be a "fee" it is a tax. Ergo it's called a gas tax, and properly so. So, you can argue symantics all you want, but in the end, you proved my point for me with your very definitions.

Answer 1

NO, you can NOT deduct those taxes on your tax return. It is not an allowable deduction.

In effect, you are correct to "a point" with the assumption of double taxation. But it how you (or the IRS) looks at it. In reality, there are many things that are taxed in many different ways. You are taxed on your Income by the US Government, you pay sales tax to your State on items you purchase, you probably pay property taxes to State, local governments, school districts, etc., and businesses pay taxes on the equipment, employess, etc in the process of providing goods or services and those "costs" are added in to the cost of the product in order to make a profit.

However, most of these taxes are levied by different government entities and under different aspects as allowed by law. Therefore, the government doesn't see this as "double-taxation". While I may not like it or agree with it, we can thank our law-makers for the excessive amounts that we have to pay in taxes in the many different forms they legislate into our lives.

Isn't it amazing that our forefathers fought for independence from a government that was over-taxing the "colonies" and yet we are letting our own government do the same thing to us again?

Update: Whatever the government wishes to call it, or how they wish to classify a "tax", the end result is the same... the end user absorbs the cost in his/her daily purchasing power and it therefore erodes the citizens paycheck and enriches the coffers of the government. Of course, this is exactly what our founding fathers fought against and won! Their intent was to free our citizens from an over-burdening government. It is a shame that we have once again fallen into the hands of the same type of government officials that use pork barrel spending and pay for it with OUR tax DOLLARS in the hopes of getting re-elected. And why do they want to get elected or re-elected in the first place? One very special reason is the fact that they get a GREAT "Retirement" package from only serving a short time in "public service".

However, this is what WE have to live with, UNTIL we can get the laws changed. And THAT is the one thing WE, The People CAN Do, if we make up our mind to do so. So, until that happens, we must live with the laws that we currently have. Below is an explanation of the laws as they currently stand. If you don't like them, DON'T Gripe about them... get INVOLVED! Call and Write your Senators and Representatives OFTEN and let them know how you feel.

Answer 2

Two additional points -

The general rule for personal income taxes is that personal expenses are NOT deductible. There are obviously exceptions to that which are written into the Internal Revenue Code including: qualified mortgage interest, state income taxes, qualified property taxes, other qualified deductions (all of the former which are itemizable), student loan interest, alimony, etc.

Second - Gasoline taxes, both federal and state are arguably "user fees" and not taxes.

As noted in the 2007 US Master Tax Guide - "Taxes are charges imposed on person or property by governmental authority to raise funds for the support of government or for public purposes.....Fees imposed primarily as charges for governmental servies aren't deductible as taxes". In other words, just because the word 'tax' is involved doesn't mean it fits the definition of what is deductible.

Most the federal gasoline taxes go to the Highway fund. I could see an argument that developing roads and highways benefits the public, but it appears to be just outside the definition of 'public purposes'. A state sales tax goes to the general treasury (of that state) and is incorporated into their overall budget. Highway taxes go some where specific.

Thankfully, the IRS does allow a deduction for some of this as business expenses or expenses for the production of income.

In conclusion, I think it is quite drama to inflate the situation without knowing the current classification of an item under the current Internal Revenue Code. Too often than not, controversy is stirred on items that the public aren't well informed about. It is very easy for a claim to be made of "That's just not fair!" without considering the actual facts. Should it be redefined? Possibly. At the end of the day, the only ones rioting in the streets are the greedy or those unable to understand facts.

Answer 3

No, you can't deduct the taxes on gasoline. The only exception is if you are claiming business miles for the actual expenses and not the standard mileage rate - then you'd deduct the cost of the gasoline used for business miles, not just the tax.

As for deducting sales tax - if you itemize, you have a choice of deducting sales tax or state and local taxes, not both - if you live in a state that has an income tax, the state and local tax total is probably higher than the sales tax you pay.

Answer 4

Agree with most this is a use tax. However, disagree with Jim's editorializing. The BIG difference between what the colonies were escaping from and what we have today is the colonies were fleeing a MONARCHY that was taxing its SUBJECTS. It is a BIG mistake to equate that to a government elected by the people for the people as a representative DEMOCRACY. True, if you want to change how things are, vote and stay informed. But, if you try to point a finger at the government as some separate evil empire: I paraphrase from Lil' Abner: We have met the enemy, and they is us!

Answer 5

The only gas taxes that can be deducted is for off road(federal taxes only on the federal tax return). You need to be sure that you have and can prove that the fuel was used off road. As for state that depends on the state and that could be for both state and federal. Farming ie tractors etc. are good examples.

Answer 6

No. Check out the Pub 17 and 1040 instructions. It is not right but it is as it is.

Answer 7

Some of the tax on gas can be deducted if it is a deductible tax.

Answer 8

Ask an Accountant.

Answer 9

Thank you for the replies, very much appreciated!