Recreational boat owners who paid state sales taxes on a boat purchase, or those who secured a loan to finance a boat, may have some tax deductions coming to them when filing their 2011 federal income tax return.
The tax tip comes from BoatUS, the nation’s largest boater’s advocacy group.
For boat owners who paid substantial state sales taxes on a new or used boat purchase last year, the Tax Extenders Act of 2008 continues to offer a federal tax deduction for state sales taxes. Boaters must choose either the state sales tax deduction or state income tax deduction on their federal tax return — and cannot take both.
In addition, to take the state sales tax deduction, the sales tax on a boat purchase must be applied at the same tax rate as the state’s general sales tax. In order to claim the sales tax deduction, tax returns must be itemized.
