Best Answer: NO, you can NOT deduct those taxes on your tax return. It is not an allowable deduction.
In effect, you are correct to "a point" with the assumption of double taxation. But it how you (or the IRS) looks at it. In reality, there are many things that are taxed in many different ways. You are taxed on your Income by the US Government, you pay sales tax to your State on items you purchase, you probably pay property taxes to State, local governments, school districts, etc. and businesses pay taxes on the equipment, employess, etc in the process of providing goods or services and those "costs" are added in to the cost of the product in order to make a profit.
However, most of these taxes are levied by different government entities and under different aspects as allowed by law. Therefore, the government doesn't see this as "double-taxation". While I may not like it or agree with it, we can thank our law-makers for the excessive amounts that we have to pay in taxes in the many different forms they legislate into our lives.
Isn't it amazing that our forefathers fought for independence from a government that was over-taxing the "colonies" and yet we are letting our own government do the same thing to us again?
Update: Whatever the government wishes to call it, or how they wish to classify a "tax", the end result is the same. the end user
absorbs the cost in his/her daily purchasing power and it therefore erodes the citizens paycheck and enriches the coffers of the government. Of course, this is exactly what our founding fathers fought against and won! Their intent was to free our citizens from an over-burdening government. It is a shame that we have once again fallen into the hands of the same type of government officials that use pork barrel spending and pay for it with OUR tax DOLLARS in the hopes of getting re-elected. And why do they want to get elected or re-elected in the first place? One very special reason is the fact that they get a GREAT "Retirement" package from only serving a short time in "public service".
However, this is what WE have to live with, UNTIL we can get the laws changed. And THAT is the one thing WE, The People CAN Do, if we make up our mind to do so. So, until that happens, we must live with the laws that we currently have. Below is an explanation of the laws as they currently stand. If you don't like them, DON'T Gripe about them. get INVOLVED! Call and Write your Senators and Representatives OFTEN and let them know how you feel.
Source(s): Here are some links below that explain the rulings as they apply to "Gas Taxes" or as the IRS defines them as "excise Taxes," therefore they are NOT "Sales Taxes," but instead are classified as "Usage Taxes."