The federal government charges excise taxes on the sale or use of a wide variety of products.

• An excise tax isn't deductible if it's for a personal expense.
• You can deduct as a business expense excise taxes that are ordinary and necessary expenses of carrying on your trade or business.
• Taxes on gasoline, diesel fuel, and other motor fuels that you use in your business are usually included as part of the cost of the fuel. Don't deduct these taxes as a separate item.
• Include state and local sales tax, or any excise tax paid on the purchase of a vehicle as part of the cost of the vehicle. If you place the vehicle in service in the tax year and use the vehicle in your business in that year, you may recover the cost of the vehicle as a section 179 deduction for that year or by taking annual depreciation deductions under section 168, including the additional first year (bonus) depreciation deduction under section 168(k). Both the section 179 deduction and section 168 depreciation deductions for the vehicle may be subject to annual limitations (for example, passenger automobiles and certain trucks and vans are subject to annual limitations for the placed-in-service year and each subsequent tax year).