Identification

• An optional sales tax deduction is when a taxpayer has the option of claiming a deduction for the state and local sales taxes they paid, rather than claiming a deduction for state and local income taxes they paid.
  
  

Significance

• This was a good option for residents of states where there are no income taxes assessed, such as Florida. Without the option to claim sales taxes, residents of these states would not be able to deduct anything from their state and local income taxes.
  
  

Considerations

• If a taxpayer did not save sales receipts throughout the year to prove how much they paid in taxes, the IRS provided a default sales tax amount to claim. Default sales tax amounts varied by state.