Sales tax is not something that can be directly deducted from your income tax return. However, there are certain circumstances in which you can deduct sales tax indirectly. State and Local Income Tax Deduction: If you itemize deductions on your federal income tax return, you can deduct either state or local income taxes or your sales tax. This is called the state and local income tax deduction. If you happen to live in a state with no state or income tax, or if the sales tax paid exceeds the income tax you paid, you can deduct the sales tax instea. Qualified Items and Major Purchases: In the case of large purchases like homes, vehicles, and boats, the sales tax paid can be added to the cost basis and potentially increase your deduction, if you are deducting state or local tax.