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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13344
Experience:  15years with H & R Block. Divisional leader, Instructor
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I closed a business approx. 3 years ago. As a result I was

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I closed a business approx. 3 years ago. As a result I was forced to file chapter 7 bankruptcy. N Y state sales tax however must be paid back. I owed approx. 15,000 and with penalty and and interest around 28,000. I have been paying back on a weekly basis 10 % of my salary for 2 years. For tax year 2014 that amounted to 1500.00 dollars, this past year it was 2,700.00 dollars. My question is can this be deducted on my personal tax return as this is a personal tax liability.
Submitted: 10 months ago.
Category: Tax
Expert:  Robin D. replied 10 months ago.

Hello

Unfortunately no. The sales tax is a trust fund obligation and not deductible.

The sales tax obligation is not an income tax. The general sales tax paid and deducted on Schedule A of your personal return would be only for general sales tax you paid in the tax year and not for any business purpose.

Had this been for personal state income taxes you would have been allowed to deduct just the tax portion but not the interest as that was a penalty and not deductible.

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