Taxes and Licenses

You may deduct the following types of taxes and licenses:

• State and local sales taxes imposed on you as the seller of goods or services. If you collected this tax from the buyer, you must include them as gross receipts or sales.
• Real estate and personal property taxes on business assets.
• Annual licenses and regulatory fees paid to state or local governments for your business. Note that certain licenses may need to be amortized (for instance, a longer-term license granted by a government agency).
• Employer-paid Social Security and Medicare taxes that match the required withholding from employees' wages.
• Federal unemployment tax.
• Federal highway use tax.
• Contributions to state unemployment insurance fund or disability benefit fund, if they are considered taxes under state law.

You may NOT deduct the following types of taxes and licenses:

• Federal income taxes, including self-employment tax.
• Estate and gift taxes.
• Taxes assessed for property improvements, such as paving or sewer installations.
• Taxes on your home or other property used for personal purposes.
• State and local sales taxes on property purchased for business use (these should be included in the property's cost).
• State and local taxes imposed on the buyer that you are required to collect and pay to the state or local government that were not included in gross receipts or sales.
• Any other taxes or license fees not directly related to your business

Do not reduce your deduction for Social Security and Medicare taxes by the amounts claimed on Form 944 or Form 941 for your business employees that relate to the nonrefundable and refundable portions of the FFCRA credits for qualified sick and family leave wages.