Quick Answer
Most taxpayers should deduct state income tax because it's typically higher than sales tax. However, residents of no-income-tax states like Texas, Florida, and Washington should deduct sales tax. The IRS sales tax tables show average deductions of $1,800-$4,200 depending on income and state, while state income taxes often exceed these amounts.
Best Answer
Robert Kim, Tax Return Analyst
W-2 employees in states with income tax who itemize deductions
Should you deduct state income tax or sales tax?
For most taxpayers, deducting state income tax produces a larger deduction than sales tax. According to IRS Publication 17, you can choose either state income tax OR sales tax as part of your state and local tax (SALT) deduction, but not both. Since the Tax Cuts and Jobs Act limits total SALT deductions to $10,000, this choice matters more than ever.
Example: Comparing the deductions
Let's say you're married filing jointly with $85,000 income living in Virginia:
State income tax paid in 2026: $3,200
Sales tax using IRS tables: $2,100 (from IRS tables for your income/state)
Property taxes: $6,500
Your total SALT deduction would be:
Choosing state income tax saves you an extra $1,100 in deductions.
When sales tax might be better
Sales tax deductions work best for taxpayers who:
How to calculate your sales tax deduction
You have two options for sales tax:
Option 1: IRS sales tax tables (most common)
The IRS provides tables based on your income and state. For 2026, typical amounts range from $1,800-$4,200.
Option 2: Actual receipts (if you kept records)
Add up all sales tax paid on purchases throughout the year. You can add major purchases (over $1,000) to the table amount.
Key factors that affect this choice
What you should do
1. Calculate both options using your actual tax software or the return-scanner tool
2. Keep major purchase receipts (over $1,000) if you might use the sales tax deduction
3. Consider your state's tax structure – income tax states usually favor the income tax deduction
4. Review this choice annually, especially if you move states or make major purchases
[Use our return-scanner tool](return-scanner) to analyze which deduction works better for your specific situation.
Key takeaway: State income tax deductions are typically $1,000-$3,000 higher than sales tax for most taxpayers, but residents of no-income-tax states should always choose sales tax instead.
*Sources: IRS Publication 17, IRS Sales Tax Deduction Tables*
Key Takeaway: State income tax deductions typically exceed sales tax by $1,000-$3,000 for most taxpayers, making it the better choice unless you live in a no-income-tax state.
Typical state income tax vs. sales tax deductions by income level
| Income Level | Avg State Income Tax | IRS Sales Tax Tables | Better Choice |
|---|---|---|---|
| $50,000 (Single) | $1,800-$3,500 | $1,600-$2,400 | State Income Tax |
| $75,000 (MFJ) | $2,500-$4,200 | $2,100-$2,800 | State Income Tax |
| $100,000 (MFJ) | $3,200-$5,800 | $2,600-$3,400 | State Income Tax |
| No-Income-Tax States | $0 | $1,800-$4,200 | Sales Tax (Only Option) |
More Perspectives
Robert Kim, Tax Return Analyst
Residents of Texas, Florida, Nevada, Washington, Wyoming, South Dakota, Tennessee, Alaska, and New Hampshire
For no-income-tax state residents: Always choose sales tax
If you live in Texas, Florida, Nevada, Washington, Wyoming, South Dakota, Tennessee, Alaska, or New Hampshire, the choice is simple – always deduct sales tax since you don't pay state income tax.
Your sales tax deduction options
IRS table method: Based on your income and state, the IRS provides standard amounts. For 2026, a married couple earning $75,000 in Texas can deduct approximately $2,800 in sales tax.
Actual receipts method: If you kept detailed records and made major purchases, you might exceed the table amount. Add your receipts for the year, including:
Maximizing your sales tax deduction
Since you're limited to sales tax, make it count:
Key takeaway: No-income-tax state residents should always choose sales tax and can often deduct $2,000-$4,000 using IRS tables, plus additional amounts for major purchases.
Key Takeaway: No-income-tax state residents should always choose sales tax and can typically deduct $2,000-$4,000 using IRS tables, plus more for major purchases.
Michelle Woodard, Tax Policy Analyst
Taxpayers who bought cars, boats, or made large purchases with significant sales tax
When major purchases change the calculation
Even in income-tax states, unusually high sales tax years might tip the scales toward the sales tax deduction. This typically happens with major purchases like vehicles, boats, or significant home improvements.
Example: Car purchase year
Say you live in North Carolina and normally pay $2,500 in state income tax. In 2026, you bought a $40,000 car with $2,800 in sales tax, plus regular purchases adding another $1,200 in sales tax.
The sales tax deduction wins by $1,500.
What qualifies as deductible sales tax
Strategic timing considerations
If you're planning major purchases, consider timing:
Key takeaway: Major purchases can make sales tax deductions $1,500-$3,000 higher than income tax deductions, but you need detailed records and strategic timing.
Key Takeaway: Major purchases can make sales tax deductions $1,500-$3,000 higher than income tax deductions, but requires detailed record-keeping and strategic timing.
Sources
- IRS Publication 17 — Your Federal Income Tax - covers state and local tax deductions
- IRS Sales Tax Deduction Tables — Official IRS tables for sales tax deductions by state and income
Reviewed by Robert Kim, Tax Return Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.