I.R.C. § 164(a) General Rule —
Except as otherwise provided in this section, the following
taxes shall be allowed as a deduction for the taxable year within
which paid or accrued:
I.R.C. § 164(a)(1) —
State and local, and foreign, real property
taxes.
I.R.C. § 164(a)(2) —
State and local personal property taxes.
I.R.C. § 164(a)(3) —
State and local, and foreign, income,
war profits, and excess profits taxes.
I.R.C. § 164(a)(4) —
The GST tax imposed on income distributions.
In addition,
there shall be allowed as a deduction State and local, and foreign,
taxes not described in the preceding sentence which are paid or accrued
within the taxable year in carrying on a trade or business or an activity
described in section 212 (relating
to expenses for production of income). Notwithstanding the preceding
sentence, any tax (not described in the first sentence of this subsection)
which is paid or accrued by the taxpayer in connection with an acquisition
or disposition of property shall be treated as part of the cost of
the acquired property or, in the case of a disposition, as a reduction
in the amount realized on the disposition.
I.R.C. § 164(b) Definitions And Special Rules —
For purposes of this section—
I.R.C. § 164(b)(1) Personal Property Taxes —
The term “personal property tax” means an
ad valorem tax which is imposed on an annual basis in respect of personal
property.
I.R.C. § 164(b)(2) State Or Local Taxes —
A State or local tax includes only a tax imposed by
a State, a possession of the United States, or a political subdivision
of any of the foregoing, or by the District of Columbia.
I.R.C. § 164(b)(3) Foreign Taxes —
A foreign tax includes only a tax imposed by the authority
of a foreign country.
I.R.C. § 164(b)(4) Special Rules For GST Tax
I.R.C. § 164(b)(4)(A) In General —
The GST tax imposed on income distributions is—
I.R.C. § 164(b)(4)(A)(i) —
the tax imposed by section 2601, and
I.R.C. § 164(b)(4)(A)(ii) —
any State tax described in section 2604 (as in effect before its
repeal),
but only to the
extent such tax is imposed on a transfer which is included in the
gross income of the distributee and to which section 666 does not apply.
I.R.C. § 164(b)(4)(B) Special Rule For Tax Paid Before Due Date —
Any tax referred to in subparagraph (A) imposed with
respect to a transfer occurring during the taxable year of the distributee
(or, in the case of a taxable termination, the trust) which is paid
not later than the time prescribed by law (including extensions) for
filing the return with respect to such transfer shall be treated as
having been paid on the last day of the taxable year in which the
transfer was made.
I.R.C. § 164(b)(5) General Sales Taxes —
For purposes of subsection (a)—
I.R.C. § 164(b)(5)(A) Election To Deduct State And Local Sales Taxes In Lieu Of State
And Local Income Taxes —
At the election of the taxpayer for the taxable year,
subsection (a) shall be applied—
I.R.C. § 164(b)(5)(A)(i) —
without regard to the reference to
State and local income taxes, and
I.R.C. § 164(b)(5)(A)(ii) —
as if State and local general sales
taxes were referred to in a paragraph thereof.
I.R.C. § 164(b)(5)(B) Definition Of General Sales Tax —
The term “general sales tax” means a tax
imposed at one rate with respect to the sale at retail of a broad
range of classes of items.
I.R.C. § 164(b)(5)(C) Special Rules For Food, Etc. —
In the case of items of food, clothing, medical supplies,
and motor vehicles—
I.R.C. § 164(b)(5)(C)(i) —
the fact that the tax does not apply
with respect to some or all of such items shall not be taken into
account in determining whether the tax applies with respect to a broad
range of classes of items, and
I.R.C. § 164(b)(5)(C)(ii) —
the fact that the rate of tax applicable
with respect to some or all of such items is lower than the general
rate of tax shall not be taken into account in determining whether
the tax is imposed at one rate.
I.R.C. § 164(b)(5)(D) Items Taxed At Different Rates —
Except in the case of a lower rate of tax applicable
with respect to an item described in subparagraph (C), no deduction
shall be allowed under this paragraph for any general sales tax imposed
with respect to an item at a rate other than the general rate of tax.
I.R.C. § 164(b)(5)(E) Compensating Use Taxes —
A compensating use tax with respect to an item shall
be treated as a general sales tax. For purposes of the preceding sentence,
the term “compensating use tax” means, with respect to
any item, a tax which—
I.R.C. § 164(b)(5)(E)(i) —
is imposed on the use, storage, or consumption
of such item, and
I.R.C. § 164(b)(5)(E)(ii) —
is complementary to a general sales
tax, but only if a deduction is allowable under this paragraph with
respect to items sold at retail in the taxing jurisdiction which are
similar to such item.
I.R.C. § 164(b)(5)(F) Special Rule For Motor Vehicles —
In the case of motor vehicles, if the rate of tax exceeds
the general rate, such excess shall be disregarded and the general
rate shall be treated as the rate of tax.
I.R.C. § 164(b)(5)(G) Separately Stated General Sales Taxes —
If the amount of any general sales tax is separately
stated, then, to the extent that the amount so stated is paid by the
consumer (other than in connection with the consumer's trade or business)
to the seller, such amount shall be treated as a tax imposed on, and
paid by, such consumer.
I.R.C. § 164(b)(5)(H) Amount Of Deduction May Be Determined Under Tables
I.R.C. § 164(b)(5)(H)(i) In General —
At the election of the taxpayer for the taxable year,
the amount of the deduction allowed under this paragraph for such
year shall be—
I.R.C. § 164(b)(5)(H)(i)(I) —
the amount determined under this paragraph
(without regard to this subparagraph) with respect to motor vehicles,
boats, and other items specified by the Secretary, and
I.R.C. § 164(b)(5)(H)(i)(II) —
the amount determined under tables
prescribed by the Secretary with respect to items to which subclause
(I) does not apply.
I.R.C. § 164(b)(5)(H)(ii) Requirements For Tables —
The tables prescribed under clause (i)—
I.R.C. § 164(b)(5)(H)(ii)(I) —
shall reflect the provisions of this
paragraph,
I.R.C. § 164(b)(5)(H)(ii)(II) —
shall be based on the average consumption
by taxpayers on a State-by-State basis (as determined by the Secretary)
of items to which clause (i)(I) does not apply, taking into account
filing status, number of dependents, adjusted gross income, and rates
of State and local general sales taxation, and
I.R.C. § 164(b)(5)(H)(ii)(III) —
need only be determined with respect
to adjusted gross incomes up to the applicable amount (as determined
under section 68(b)).
I.R.C. § 164(b)(6) Limitation On Individual Deductions For Taxable Years 2018 Through
2025 —
In the case of an individual and
a taxable year beginning after December 31, 2017, and before January
1, 2026—
I.R.C. § 164(b)(6)(A) —
foreign real property taxes shall not
be taken into account under subsection (a)(1), and
I.R.C. § 164(b)(6)(B) —
the aggregate amount of taxes taken into
account under paragraphs (1), (2), and (3) of subsection (a) and paragraph
(5) of this subsection for any taxable year shall not exceed $10,000
($5,000 in the case of a married individual filing a separate return).
The preceding sentence shall not
apply to any foreign taxes described in subsection (a)(3) or to any
taxes described in paragraph (1) and (2) of subsection (a) which are
paid or accrued in carrying on a trade or business or an activity
described in section 212.
For purposes of subparagraph (B), an amount paid in a taxable year
beginning before January 1, 2018, with respect to a State or local
income tax imposed for a taxable year beginning after December 31,
2017, shall be treated as paid on the last day of the taxable year
for which such tax is so imposed.
I.R.C. § 164(c) Deduction Denied In Case Of Certain Taxes —
No deduction shall be allowed for the following taxes:
I.R.C. § 164(c)(1) —
Taxes assessed against local benefits
of a kind tending to increase the value of the property assessed;
but this paragraph shall not prevent the deduction of so much of such
taxes as is properly allocable to maintenance or interest charges.
I.R.C. § 164(c)(2) —
Taxes on real property, to the extent
that subsection (d) requires
such taxes to be treated as imposed on another taxpayer.
I.R.C. § 164(d) Apportionment Of Taxes On Real Property Between Seller And Purchaser
I.R.C. § 164(d)(1) General Rule —
For purposes of subsection (a), if real property is
sold during any real property tax year, then—
I.R.C. § 164(d)(1)(A) —
so much of the real property tax as
is properly allocable to that part of such year which ends on the
day before the date of the sale shall be treated as a tax imposed
on the seller, and
I.R.C. § 164(d)(1)(B) —
so much of such tax as is properly allocable
to that part of such year which begins on the date of the sale shall
be treated as a tax imposed on the purchaser.
I.R.C. § 164(d)(2) Special Rules
I.R.C. § 164(d)(2)(A) —
in the case of any sale of real property,
if—
I.R.C. § 164(d)(2)(A)(i) —
a taxpayer may not, by reason of his
method of accounting, deduct any amount for taxes unless paid, and
I.R.C. § 164(d)(2)(A)(ii) —
the other party to the sale is (under
the law imposing the real property tax) liable for the real property
tax for the real property tax year,
then for purposes
of subsection (a) the taxpayer shall be treated as having paid, on
the date of the sale, so much of such tax as, under paragraph (1)
of this subsection, is treated as imposed on the taxpayer. For purposes
of the preceding sentence, if neither party is liable for the tax,
then the party holding the property at the time the tax becomes a
lien on the property shall be considered liable for the real property
tax for the real property tax year.
I.R.C. § 164(d)(2)(B) —
In the case of any sale of real property,
if the taxpayer's taxable income for the taxable year during which
the sale occurs is computed under an accrual method of accounting,
and if no election under section 461(c) (relating
to the accrual of real property taxes) applies, then, for purposes
of subsection (a), that portion of such tax which—
I.R.C. § 164(d)(2)(B)(i) —
is treated, under paragraph (1) of this
subsection, as imposed on the taxpayer, and
I.R.C. § 164(d)(2)(B)(ii) —
may not, by reason of the taxpayer's
method of accounting, be deducted by the taxpayer for any taxable
year,
shall be treated
as having accrued on the date of the sale.
I.R.C. § 164(e) Taxes Of Shareholder Paid By Corporation —
Where a corporation pays a tax imposed on a shareholder
on his interest as a shareholder, and where the shareholder does not
reimburse the corporation, then—
I.R.C. § 164(e)(1) —
the deduction allowed by subsection
(a) shall be allowed to the corporation; and
I.R.C. § 164(e)(2) —
no deduction shall be allowed the shareholder
for such tax.
I.R.C. § 164(f) Deduction For One-Half Of Self-Employment Taxes
I.R.C. § 164(f)(1) In General —
In the case of an individual, in addition to the taxes
described in subsection (a), there shall be allowed as a deduction
for the taxable year an amount equal to one-half of the taxes imposed
by section 1401 (other
than the taxes imposed by section 1401(b)(2)) for such taxable
year.
I.R.C. § 164(f)(2) Deduction Treated As Attributable To Trade Or Business —
For purposes of this chapter, the deduction allowed
by paragraph (1) shall be treated as attributable to a trade or business
carried on by the taxpayer which does not consist of the performance
of services by the taxpayer as an employee.
I.R.C. § 164(g) Cross References
I.R.C. § 164(g)(1) —
For provisions disallowing any deduction
for certain taxes, see section 275Link.
I.R.C. § 164(g)(2) —
For treatment of taxes imposed by Indian
tribal governments (or their subdivisions), see section 7871.
(Aug. 16, 1954, ch. 736, 68A Stat.
47; Sept. 2, 1958, Pub. L. 85-866,
title I, 6(a), 72 Stat. 1608; Feb. 26, 1964, Pub. L. 88-272, title II, 207(a),
(b)(1), (2), 78 Stat. 40-42; Oct. 27, 1972, Pub. L. 92-580, 4(a), 86 Stat. 1277;
Oct. 4, 1976, Pub. L. 94-455,
title XIX, 1901(a)(25), 1951(b)(3)(A), 90 Stat. 1767, 1837; Nov. 6,
1978, Pub. L. 95-600,
title I, 111(a), (b), 92 Stat. 2777; Apr. 2, 1980, Pub. L. 96-223, title I, 101(b),
94 Stat. 250; Jan. 14, 1983, Pub. L.
97-473, title II, 202(b)(3), 96 Stat. 2609; July
18, 1984, Pub. L. 98-369,
div. A, title IV, 474(r)(29)(F), 98 Stat. 844; Oct. 17, 1986, Pub. L. 99-499, title V, 516(b)(2)(A),
100 Stat. 1771; Oct. 22, 1986, Pub.
L. 99-514, title I, 134, title XIV, 1432(a)(1), (2),
100 Stat. 2116, 2729; Aug. 23, 1988, Pub.
L. 100-418, title I, 1941(b)(2)(A), 102 Stat. 1323;
Nov. 10, 1988, Pub. L. 100-647,
title I, 1018(u)(11), 102 Stat. 3590; Aug. 20, 1996, Pub. L. 104-188, title I, 1704(t)(79),
110 Stat. 1755; Oct. 22, 2004, Pub.
L. 108-357, title V, 501(a), 118 Stat. 1418; Dec.
21, 2005, Pub. L. 109-135,
title IV, 403(r)(1), 119 Stat. 2577; Dec. 20, 2006, Pub. L. 109-432, div. A, title
I, Sec. 103(a), 120 Stat. 2922; Pub.
L. 110-343, div. C, title II, Sec. 201(a), Oct. 3,
2008, 122 Stat. 3765; Pub. L. 111-5,
div. B, title I, Sec. 1008, Feb. 17, 2009, 123 Stat. 115; Pub. L. 111-148, Sec. 9015(b)(2)(A),
Mar. 23, 2010, 124 Stat. 119; Pub.
L. 111-312, Sec. 722, Dec. 17, 2010, 124 Stat. 3296; Pub. L. 112-240, title II, Sec.
205(a), Jan. 2, 2013, 126 Stat. 2313; Pub.
L. 113-295, Div. A, title I, Sec. 105(a), title II,
Sec. 209(c), 221(a)(12)(D), 221(a)(26), 221(a)(95)(B)(ii), Dec. 19,
2014, 128 Stat. 4010; Pub. L. 114-113,
Div. Q, title I, Sec. 106(a); Pub. L. 115-97,
title I, Sec. 11042(a), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 117-169, title I, 13903(a)(1)(A),
(B), Sec. 13904(b)(1)(A), (B), Aug. 16, 2022, 136 Stat. 1818.)
BACKGROUND NOTES
AMENDMENTS
2022 — Subsec. (b)(6). Pub. L. 117-169, Sec. 13904(b)(1)(A),
substituted “2026” for “2025” in the heading.
Subsec. (b)(6). Pub.
L. 117-169, Sec. 13904(b)(1)(B), substituted “2027”
for “2026”.
Subsec. (b)(6). Pub.
L. 117-169, Sec. 13903(a)(1)(A), substituted “2025”
for “2026” in the heading.
Subsec. (b)(6). Pub.
L. 117-169, Sec. 13903(a)(1)(B), substituted “2026”
for “2027”.
2017 — Subsec. (b). Pub. L. 115-97, Sec. 11042(a),
amended subsec. (b), by adding new par. (6).
2015 — Subsec. (b)(5)(I). Pub. L. 114-113, Div. Q, Sec. 106(a), struck
subpar. (I). Before being struck, it read as follows:
“(I) Application Of Paragraph.—This
paragraph shall apply to taxable years beginning after December 31,
2003, and before January 1, 2015.”
2014 — Subsec. (a)(5). Pub. L. 113-295, Div. A, Sec. 221(a)(12)(D),
amended subsec. (a) by striking par. (5). Before being struck, it
read as follows:
“(5) The environmental tax imposed by section
59A.
Subsec. (a)(6). Pub.
L. 113-295, Div. A, Sec. 221(a)(26), amended subsec.
(a) by striking par. (6). Before being struck, it read as follows:
“(6) Qualified motor vehicle taxes.”
Subsec. (b)(4)(A)(ii). Pub. L. 113-295, Div. A, Sec. 221(a)(95)(B)(ii),
amended clause (ii) by inserting “(as in effect before its repeal)”
after “section 2604”.
Subsec. (b)(5)(I). Pub.
L. 113-295, Div. A, Sec. 105(a), amended subpar.
(I) by substituting “January 1, 2015” for “January
1, 2014”.
Subsec. (b)(6)(E)–(G). Pub. L. 113-295, Div. A, Sec. 209(c)(1),
amended par. (6) by striking subpar. (E) and by redesignating subpars.
(F)–(G) as (E)–(F), respectively. Before being struck,
subpar. (E) read as follows:
“(E) Qualified Motor Vehicle Taxes Not Included
In Cost Of Acquired Property.—The last sentence of subsection
(a) shall not apply to any qualified motor vehicle taxes.”
Subsec. (b)(6)(E). Pub.
L. 113-295, Div. A, Sec. 209(c)(2), amended subpar.
(E), after redesignation, by substituting “Subsection (a)(6)”
for “This paragraph”.
Subsec. (b)(6)(F). Pub.
L. 113-295, Div. A, Sec. 209(c)(2), amended subpar.
(F), after redesignation, by substituting “Subsection (a)(6)”
for “This paragraph”.
Subsec. (b)(6). Pub.
L. 113-295, Div. A, Sec. 221(a)(26), amended subsec.
(b) by striking par. (6). Before being struck, it read as follows:
“(6) Qualified Motor Vehicle Taxes.—
“(A) In General.—For purposes of this
section, the term ‘qualified motor vehicle taxes' means any
State or local sales or excise tax imposed on the purchase of a qualified
motor vehicle.
“(B) Limitation Based On Vehicle Price.—The
amount of any State or local sales or excise tax imposed on the purchase
of a qualified motor vehicle taken into account under subparagraph
(A) shall not exceed the portion of such tax attributable to so much
of the purchase price as does not exceed $49,500.
“(C) Income Limitation.—The amount
otherwise taken into account under subparagraph (after the application
of subparagraph (B)) for any taxable year shall be reduced (but not
below zero) by the amount which bears the same ratio to the amount
which is so treated as—
“(i) the excess (if any) of—
“(I) the taxpayer's modified adjusted gross
income for such taxable year, over
“(II) $125,000 ($250,000 in the case of a
joint return), bears to
“(ii) $10,000. For purposes of the preceding
sentence, the term “modified adjusted gross income” means
the adjusted gross income of the taxpayer for the taxable year (determined
without regard to sections 911, 931, and 933).
“(D) Qualified Motor Vehicle.—For purposes
of this paragraph—
“(i) In General.—The term ‘qualified
motor vehicle' means—
“(I) a passenger automobile or light truck
which is treated as a motor vehicle for purposes of title II of the
Clean Air Act, the gross vehicle weight rating of which is not more
than 8,500 pounds, and the original use of which commences with the
taxpayer,
“(II) a motorcycle the gross vehicle weight
rating of which is not more than 8,500 pounds and the original use
of which commences with the taxpayer, and
“(III) a motor home the original use of which
commences with the taxpayer.
“(ii) Other Terms.—The terms ‘motorcycle'
and ‘motor home' have the meanings given such terms under section
571.3 of title 49, Code of Federal Regulations (as in effect on the
date of the enactment of this paragraph).
“(E) Coordination With General Sales Tax.—Subsection
(a)(6) shall not apply in the case of a taxpayer who makes an election
under paragraph (5) for the taxable year.
“(F) Termination.—Subsection (a)(6)
shall not apply to purchases after December 31, 2009.”
2013 — Subsec. (b)(5)(I). Pub. L. 112-240, Sec. 205(a),
amended subpar. (I) by substituting “January 1, 2014”
for “January 1, 2012”.
2010 — Subsec. (b)(5)(I). Pub. L. 111-312, Sec. 722(a),
amended subpar. (I) by substituting “January 1, 2012”
for “January 1, 2010”.
Subsec. (f). Pub. L. 111-148,
Sec. 9015(b)(2)(A), amended subsec. (f) by inserting “(other
than the taxes imposed by section 1401(b)(2))” after “section
1401)”.
2009 — Subsec. (a)(6). Pub. L. 111-5, Div. B, Sec. 1008(a),
amended subsec. (a) by adding par. (6).
Subsec. (b)(6). Pub.
L. 111-5, Div. B, Sec. 1008(b), amended subsec. (b)
by adding par. (6).
2008 — Subsec. (b)(5)(I).Pub. L. 110-343, Div. C, Sec. 201(a),
amended subpar. (I) by substituting “January 1, 2010”
for “January 1, 2008”.
2006 — Subsec. (b)(5)(I).Pub. L. 109-432, Sec. 103(a),
amended subpar. (I) by substituting “2008” for “2006”.
2005 — Subsec. (b)(5)(A).Pub. L. 109-135, Sec. 403(r)(1),
amended subpar. (A). Before amendment, it read as follows:
“(A) Election To Deduct State And Local Sales
Taxes In Lieu Of State And Local Income Taxes.—
“(i) In General.—At the election of
the taxpayer for the taxable year, subsection (a) shall be applied—
“(I) without regard to the reference to State
and local income taxes, and
“(II) as if State and local general sales
taxes were referred to in a paragraph thereof.”
2004 — Subsec. (a). Pub. L. 108-357, sec. 501(a) added
par. (5).
1996 — Subsec. (a). Pub. L. 104-188, sec. 1704(t)(79) struck
out pars. (4)–(5) and added new pars. (4)–(5). Prior to
amendment the paragraphs read as follows:
“(4) The environmental tax imposed by section
59A.
“(5) The GST tax imposed on income distributions.”
1988 — Subsec. (a)(4). Pub. L. 100-418 struck out par.
(4) relating to windfall profit tax imposed by section 4986 and redesignated
par. (5) relating to environmental tax as (4).
Subsec. (a)(5). Pub.
L. 100-647 substituted “The GST” for “the
GST”.
Pub. L. 100-418 redesignated
par. (5), relating to environmental tax, as (4).
1986 — Subsec. (a). Pub. L. 99-514, 134(a)(2), inserted “Notwithstanding
the preceding sentence, any tax (not described in the first sentence
of this subsection) which is paid or accrued by the taxpayer in connection
with an acquisition or disposition of property shall be treated as
part of the cost of the acquired property or, in the case of a disposition,
as a reduction in the amount realized on the disposition.”
Subsec. (a)(4). Pub.
L. 99-514, 134(a)(1), struck out par. (4) relating
to “State and local general sales taxes” and redesignated
as par. (4) former par. (5) relating to windfall profit tax.
Subsec. (a)(5). Pub.
L. 99-514, Sec. 1432(a)(1), added par. (5) relating
to GST tax imposed on income distributions.
Pub. L. 99-499 added
par. (5) relating to environmental tax.
Subsec. (b)(2). Pub.
L. 99-514, Sec. 134(b)(1), (2), redesignated par.
(3) as (2) and struck out former par. (2), general sales taxes provisions,
subpars. (A) to (E) of which covered in general rule, special rules
for food, etc., items taxed at different rates, compensating use taxes,
and special rules for motor vehicles, respectively.
Subsec. (b)(3). Pub.
L. 99-514, Sec. 134(b)(2), redesignated par. (4)
as (3). Former par. (3) redesignated (2).
Subsec. (b)(4). Pub.
L. 99-514, Sec. 1432(a)(2), added par. (4).
Pub. L. 99-514,
Sec. 134(b)(2), redesignated par. (4) as (3).
Subsec. (b)(5). Pub.
L. 99-514, Sec. 134(b)(1), struck out par. (5), separately
stated general sales taxes, which read as follows: “If the amount
of any general sales tax is separately stated, then, to the extent
that the amount so stated is paid by the consumer (otherwise than
in connection with the consumer's trade or business) to his seller,
such amount shall be treated as a tax imposed on, and paid by, such
consumer.”
1984 — Subsec. (f). Pub. L. 98-369 redesignated pars.
(2) and (3) as pars. (1) and (2), respectively. Former par. (1), which
referred to section 1451 for provisions disallowing any deduction
for the payment of the tax imposed by subchapter B of chapter 3 (relating
to tax-free covenant bonds), was struck out.
1983 — Subsecs. (f)–(g). Pub. L. 98-21, Sec. 124(c)(1), redesignated
subsec. (f) as subsec. (g) and added a new subsec. (f). that, applicable
to taxable years beginning after Dec. 31, 1989, subsec. (f) of this
section is redesignated (g) and a new subsec. (f).
Subsec. (f)(3). Pub.
L. 97-473 added par. (3).
1980 — Subsec. (a)(5). Pub. L. 96-223 added par. (5).
1978 — Subsec. (a)(5). Pub. L. 95-600, Sec. 111(a), struck
out par. (5) relating to a deduction for State and local taxes on
the sale of gasoline, diesel fuel, and other motor fuels.
Subsec. (b)(5). Pub.
L. 95-600, Sec. 111(b), struck out in heading “and
gasoline taxes” after “sales taxes”, and in text “or
of any tax on the sale of gasoline, diesel fuel, or other motor fuel”
after “sales tax”.
1976 — Subsec. (d)(2). Pub. L. 94-455, Sec. 1901(a)(25),
redesignated subpar. (D) as (B), and struck out subpar. (B) which
related to the taxable years that subsec. (d)(1) applied and subpar.
(C) which related to the limitations on subsec. (d)(1) where real
property tax was allowable as a deduction under the Internal Revenue
Code of 1939.
Subsecs. (f), (g). Pub.
L. 94-455, Sec. 1951(b)(3)(A), redesignated subsec.
(g) as (f). Former subsec. (f), which related to payments for municipal
services in atomic energy communities, was struck out.
1972 — Subsec. (b)(2)(E).Pub. L. 92-580 added subpar. (E).
1964 — Subsec. (a). Pub. L. 88-272, Sec. 207(a), limited
the subsection to State, local and foreign real property, income,
war profits, excess profits, and unspecified taxes, on a business
or activity described in section 212, and to State and local personal
property, general sales, gasoline, diesel fuel and other motor fuel
taxes.
Subsec. (b). Pub.
L. 88-272, Sec. 207(a), added subsec. (b). Former
subsec. (b), which denied the deduction for certain Federal income
taxes, for Federal war profits and excess profits taxes, import duties,
excise and stamp taxes, and estate, inheritance, legacy, succession
and gift taxes, local assessments against benefits increasing property
values, and certain taxes imposed by any foreign country or possession
of the United States if the taxpayer chose to benefit by section 901
relating to foreign tax credit, and for taxes on real property to
the extent that they are treated as imposed on another taxpayer, was
struck out.
Subsec. (c). Pub.
L. 88-272, Sec. 207(a), substituted provisions denying
the deduction for taxes assessed against local benefits which increase
property value, except for so much as is properly allocable to maintenance
or interest charges, and for real property taxes to the extent they
are treated as imposed on another taxpayer, for provisions relating
to certain retail sales taxes and gasoline taxes, the extent to which
they were deductible, and to definition of “state or local sales
tax”.
Subsec. (f). Pub.
L. 88-272, Sec. 207(b)(1), inserted “State”
before “real property taxes”.
Subsec. (g). Pub.
L. 88-272, Sec. 207(b)(2), designated existing provisions
as par. (1), substituted “1451” for “1451(f)”
and added par. (2).
1958 — Subsecs. (f),
(g). Pub. L. 85-866,
Sec. 6(a), added subsec. (f) and redesignated former subsec. (f) as
(g).
EFFECTIVE DATE OF 2022 AMENDMENTS
Amendments by Pub.
L. 117-169, Sec. 13903(a)(1)(A), (B), effective for
taxable years beginning after December 31, 2022.
Amendments by Pub.
L. 117-169, Sec. 13904(b)(1)(A), (B), effective for
taxable years beginning after December 31, 2022.
EFFECTIVE DATE OF 2017 AMENDMENT
Amendment by Pub.
L. 115-97, Sec. 11042(a), effective for taxable years beginning
after December 31, 2016.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendment by Pub.
L. 113-295, Div. A, Sec. 105(a), effective for taxable
years beginning after December 31, 2013.
Amendments by Pub.
L. 113-295, Div. A, Sec. 209(c), effective as if
included in the provisions of the American Recovery and Reinvestment
Tax Act of 2009 [Pub. L. 111-5,
Div. B, Sec. 1008] to which they relate [Effective for purchases on
or after Feb. 17, 2009 in taxable years ending after such date.
Amendments by Pub.
L. 113-295, Div. A, Sec. 221(a), effective on the
day of the enactment of this Act [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub.
L. 113-295, Div. A, provided the following Savings
Provision:
“(2) Savings Provision.—If—
“(A) any provision amended or repealed by
the amendments made by this section applied to—
“(i) any transaction occurring before the
date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date
of enactment, or
“(iii) any item of income, loss, deduction,
or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property,
or item under such provision would (without regard to the amendments
or repeals made by this section) affect the liability for tax for
periods ending after date of enactment, nothing in the amendments
or repeals made by this section shall be construed to affect the treatment
of such transaction, property, or item for purposes of determining
liability for tax for periods ending after such date of enactment.”
EFFECTIVE DATE OF 2015 AMENDMENT
Amendment by Pub. L.
114-113, Div. Q, Sec. 106(a), effective for taxable years
beginning after December 31, 2014.
EFFECTIVE DATE OF 2013 AMENDMENT
Amendment by Section 205 of Pub. L. 112-240 effective for taxable
years beginning after December 31, 2011.
EFFECTIVE DATE OF 2010 AMENDMENT
Amendment by Section 722 of Pub. L. 111-312 effective for taxable
years beginning after December 31, 2010.
Amendment by Section 9015(b) of Pub. L. 111-148 effective with respect
to remuneration received, and taxable years beginning, after December
31, 2012.
EFFECTIVE DATE OF 2009 AMENDMENTS
Amendments by Div. B, Section 1008 of Pub. L. 111-5 effective for purchases
on or after the date of the enactment of this Act [Enacted: Feb. 17,
2009] in taxable years ending after such date.
EFFECTIVE DATE OF 2008 AMENDMENT
Amendment by Div. C, Section 201(a) of Pub. L. 110-343 effective for taxable
years beginning after December 31, 2007.
EFFECTIVE DATE OF 2006 AMENDMENT
Amendment by Section 103(a) of Pub. L. 109-432 effective for taxable
years beginning after December 31, 2005.
EFFECTIVE DATE OF 2005 AMENDMENT
Amendment by Section 403(r)(1) of Pub. L. 109-135 effective as if
included in the provisions of the American Jobs Creation Act of 2004 [Pub. L. 108-357, Sec. 501]
to which it relates.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendment by Section 501(a) of Pub. L. 108-357 effective for taxable
years beginning after Dec. 31, 2003.
EFFECTIVE DATE OF 1988 AMENDMENTS
Amendment by Pub.
L. 100-647 effective, except as otherwise provided,
as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment
relates, see section 1019(a) of Pub.
L. 100-647, set out as a note under section 1 of
this title.
Section 1941(c) of Pub.
L. 100-418 provided that: “The amendments made
by this section [amending sections 164, 193, 291, 6161, 6211, 6212,
6213, 6214, 6302, 6344, 6501, 6511, 6512, 6611, 6654, 6655, 6724,
6862, 7422, and 7512 of this title, and repealing sections 280D, 4986
to 4998, 6050C, 6076, 6232, 6429, 6430, and 7241 of this title] shall
apply to crude oil removed from the premises on or after the date
of the enactment of this Act [Aug. 23, 1988].”
EFFECTIVE DATE OF 1986 AMENDMENTS
Amendment by section 134 of Pub. L. 99-514 applicable to taxable
years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99-514, set out as a note
under section 1 of this title.
Amendment by section 1432(a)(1), (2) of Pub. L. 99-514 applicable to generation-skipping
transfers (within the meaning of section 2611 of this title) made
after Oct. 22, 1986, except as otherwise provided, see section 1433
of Pub. L. 99-514,
set out as an Effective Date note under section 2601 of this title.
Amendment by Pub.
L. 99-499 applicable to taxable years beginning after
Dec. 31, 1986, see section 516(c) of Pub.
L. 99-499, set out as a note under section 26 of
this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub.
L. 98-369 not applicable with respect to obligations
issued before Jan. 1, 1984, see section 475(b) of Pub. L. 98-369, set out as a note
under section 33 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section 204(1)
of Pub. L. 97-473,
set out as an Effective Date note under section 7871 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub.
L. 96-223 applicable to periods after Feb. 29, 1980,
see section 101(i) of Pub. L. 96-223,
set out as an Effective Date note under section 6161 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Section 111(c) of Pub.
L. 95-600 provided that: “The amendments made
by this section [amending this section] shall apply to taxable years
beginning after December 31, 1978.”
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub.
L. 94-455 applicable with respect to taxable years
beginning after Dec. 31, 1976, see sections 1901(d) and 1951(d) of Pub. L. 94-455, set out as notes
under sections 2 and 72 of this title, respectively.
EFFECTIVE DATE OF 1972 AMENDMENT
Section 4(b) of Pub.
L. 92-580 provided that: “The amendment made
by subsection (a) [amending this section] shall apply to taxable years
ending on or after January 1, 1971.”
EFFECTIVE DATE OF 1964 AMENDMENT
Section 207(c) of Pub.
L. 88-272, as amended byPub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095,
provided that:
“(1) General Rule.—Except as provided
in paragraph (2), the amendments made by this section [enacting section
275 of this title and amending sections 164, 535, 545, 556, 901, and
903 of this title] shall apply to taxable years beginning after December
31, 1963.
“(2) Special Taxing Districts.—Section 164(c)(1) of the Internal Revenue Code of
1986 [formerly I.R.C. 1954]
(as amended by subsection (a)) shall not prevent the deduction under
section 164 of such Code (as so amended) of taxes levied by a special
taxing district which is described in section 164(b)(5) of such Code
(as in effect for a taxable year ending on December 31, 1963) and
which was in existence on December 31, 1963, for the purpose of retiring
indebtedness existing on such date.”
EFFECTIVE DATE OF 1958 AMENDMENT
Section 6(b) of Pub.
L. 85-866 provided that: “The amendments made
by subsection (a) [amending this section] shall apply with respect
to taxable years beginning after December 31, 1957.”
TEMPORARY EMPLOYEE PAYROLL TAX CUT
Section 601 of Pub.
L. 111-312, as amended by Pub. L. 112-78, Sec. 101, and Pub. L. 112-96, Sec. 1001, provided
that:
“Sec. 601. Temporary Employee Payroll Tax
Cut.
“(a) In General.—Notwithstanding any
other provision of law—
“(1) with respect to any taxable year which
begins in the payroll tax holiday period, the rate of tax under section 1401(a) of the Internal Revenue Code of
1986 shall be 10.40 percent, and
“(2) with respect to remuneration received
during the payroll tax holiday period, the rate of tax under 3101(a)
of such Code shall be 4.2 percent (including for purposes of determining
the applicable percentage under sections 3201(a) and 3211(a)(1) of
such Code).
“(b) Coordination With Deductions For Employment
Taxes.—
“(1) Deduction In Computing Net Earnings
From Self-Employment.—For purposes of applying section 1402(a)(12) of the Internal Revenue
Code of 1986, the rate of tax imposed by subsection 1401(a)
of such Code shall be determined without regard to the reduction in
such rate under this section.
“(2) Individual Deduction.—In the case
of the taxes imposed by section 1401 of such Code for any taxable
year which begins in the payroll tax holiday period, the deduction
under section 164(f) of such Code with respect to such taxes shall
be equal to the sum of—
“(A) 59.6 percent of the portion of such
taxes attributable to the tax imposed by section 1401(a) of such Code
(determined after the application of this section), plus
“(B) one-half of the portion of such taxes
attributable to the tax imposed by section 1401(b) of such Code.
“(c) Payroll Tax Holiday Period.—The
term ‘payroll tax holiday period' means calendar years 2011
and 2012.
“(d) Employer Notification.—The Secretary
of the Treasury shall notify employers of the payroll tax holiday
period in any manner the Secretary deems appropriate.
“(e) Transfers Of Funds.—
“(1) Transfers To Federal Old-Age And Survivors
Insurance Trust Fund.—There are hereby appropriated to the Federal
Old-Age and Survivors Trust Fund and the Federal Disability Insurance
Trust Fund established under section 201 of
the Social Security Act (42 U.S.C. 401)
amounts equal to the reduction in revenues to the Treasury by reason
of the application of subsection (a). Amounts appropriated by the
preceding sentence shall be transferred from the general fund at such
times and in such manner as to replicate to the extent possible the
transfers which would have occurred to such Trust Fund had such amendments
not been enacted.
“(2) Transfers To Social Security Equivalent
Benefit Account.—There are hereby appropriated to the Social
Security Equivalent Benefit Account established under section 15A(a)
of the Railroad Retirement Act of 1974 (45
U.S.C. 231n-1(a)) amounts equal to the reduction in revenues
to the Treasury by reason of the application of subsection (a)(2).
Amounts appropriated by the preceding sentence shall be transferred
from the general fund at such times and in such manner as to replicate
to the extent possible the transfers which would have occurred to
such Account had such amendments not been enacted.
“(3) Coordination With Other Federal Laws.—For
purposes of applying any provision of Federal law other than the provisions
of the Internal Revenue Code of 1986, the rate of tax in effect under
section 3101(a) of such Code shall be determined without regard to
the reduction in such rate under this section.”
Pub. L.
112-96, Sec. 1001(b), struck subsec. (f) and (g)
of Sec. 601 of Pub. L. 111-312,
as amended by Pub. L. 112-78,
Sec. 101, effective for remuneration received, and taxable years beginning,
after December 31, 2011. Before being struck, Sec. 601(f) and (g)
read as follows:
“(f) Special Rules For 2012.—
“(1) Limitation On Self-Employment Income.—In
the case of any taxable year beginning in 2012, subsection (a)(1)
shall only apply with respect to so much of the taxpayer's self-employment
income (as defined in section 1402(b)
of the Internal Revenue Code of 1986) as does not exceed
the excess (if any) of—
“(A) $18,350, over
“(B) the amount of wages and compensation
received during the portion of the payroll tax holiday period occurring
during 2012 subject to tax under section 3101(a) of such Code or section
3201(a) of such Code.
“(2) Coordination With Deduction For Employment
Taxes.—In the case of a taxable year beginning in 2012, subparagraph
(A) of subsection (b)(2) shall be applied as if it read as follows:
“(A) the sum of—
“(i) 59.6 percent of the portion of such
taxes attributable to the tax imposed by section 1401(a) of such Code
(determined after the application of this section) on so much of self-employment
income (as defined in section 1402(b) of such Code) as does not exceed
the amount of self-employment income described in paragraph (1), plus
“(ii) one-half of the portion of such taxes
attributable to the tax imposed by section 1401(a) of such Code (determined
without regard to this section) on self-employment income (as so defined)
in excess of such amount, plus'.
“(g) Recapture Of Excess Benefit.—
“(1) In General.—There is hereby imposed
on the income of every individual a tax equal to 2 percent of the
sum of wages (within the meaning of section
3121(a)(1) of the Internal Revenue Code of 1986) and compensation
(to which section 3201(a) of such Code applies) received during the
period beginning January 1, 2012, and ending February 29, 2012, to
the extent the amount of such sum exceeds $18,350.
“(2) Regulations.—The Secretary of
the Treasury or the Secretary's delegate shall prescribe such regulations
or other guidance as may be necessary or appropriate to carry out
this subsection, including guidance for payment by the employee of
the tax imposed by paragraph (1).”
SAVINGS PROVISION
Section 1951(b)(3)(B) of Pub. L. 94-455 provided that: “Notwithstanding
subparagraph (A) [amending this section], any amount paid or accrued
in a taxable year beginning after December 31, 1976, to the Atomic
Energy Commission or its successors for municipal-type services shall
be allowed as a deduction under section 164 if such amount would have
been deductible by reason of section 164(f) (as in effect for a taxable
year ending on December 31, 1976) and if the amount is paid or accrued
with respect to real property in a community (within the meaning of
section 21(b) of the Atomic Energy Community Act of 1955 (42 U.S.C. 2304(b))) in which
the Commission on December 31, 1976, was rendering municipal-type
services for which it received compensation from the owners of property
within such community.”
