How does the deduction for state and local taxes work?

Taxpayers who itemize deductions can deduct:

1. Either state and local income taxes or general sales taxes
2. State and local real estate taxes
3. Personal property taxes

The total state and local tax deduction is limited to $40,000 ($20,000 for Married Filing Separately filers).

Any other deductible tax, entered on the Menu Path: Deductions/Credits > Itemized Deductions > Taxes Paid screen, isn't subject to the limitation.