NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

IRS Sales Tax Tables

This directory contains copies of the offical IRS sales tax tables for 2004+ in several formats. The .xls files were supplied by Alan Plumley of the IRS Research Division. These are formatted for IRS publications 600 and 600-A and not suitable for machine processing. Here at the NBER we have cut-and-pasted and done some processing to create other formats and also recreated the regressions from which the tables are made. The results are made available here to save others the same work. We expect to update the file each year as the form becomes available. The most usable file format is always a flat file, and here that is presented in a text file with 8 columns:

  1. year
  2. state id (Alphabetical, 1 through 51, 9 for DC)
  3. income class
  4. lower limit of income class (in thousands)
  5. upper limit of income class (999999 for infinity)
  6. family size
  7. sales tax amount allowed
  8. Name of state

For ease of use the file has fixed column locations, is space delimited, and has no embedded non-numerics. It should be easy to read with any statistical package or database language.

The same information is also available in .csv, .dta, and .xls.

The amount of tax comes from the IRS file and should be exactly as printed in the official forms.

Because the allowance amount was calculated by the IRS from a formula, and the data supplied contain roughly enough information to recreate the formula parameters, we have run the regressions suggested by the 2004 or 2005 FAQs and Mr Plumley's letter (below). This file has the regression parameters for every state and year. These wouldn't be suitable for filling out your tax form, but for statistical analysis of tax liabilities they are superior to tables because they have continuous first derivatives. They are also available in .csv , .dta, and .xls formats.

Looking at the first line of coefficients.lst, it says that for Alabama in 2004 the best estimate of the sales tax allowance is given by the following formula:

   log(salestax) = 1.911 + 0.3940*log(income) + 0.2443*log(famsize)

These are natural logs. Note that the RMSE refers to our ability to reproduce the published table from three parameters, which appears to be quite good, in spite of the fact that we use the midpoint of the income brackets for the income term, rather than the median (used by the IRS to create the tables).

Daniel Feenberg
27 March 2007
4 February 2008
15 November 2010

Date: Wed, 07 Feb 2007 13:48:28 -0500
From: Alan Plumley 
To: Daniel Feenberg 

Hi, Dan.

A number of people (e.g., software developers) have asked for the
underlying formulas, and the IRS decision has been not to release the
formulas themselves, but rather to release the tables as spreadsheets
(which I've attached).

I'm guessing that for what you're doing, you could easily derive a
curve for each state from the amounts in the table cells.  We use the
same Cobb-Douglass form for each state separately, with Tax as a
function of both Income and Exemptions (i.e., family size).

However, I'm not sure you would have enough information to determine
the appropriate local sales tax amount.  That depends on the local
sales tax rate, and there are zillions of those (well, almost).

I'm also attaching the FAQs for 2004 and 2005.  2006 was the same as
2005.

Let me know if you have any additional questions.

Best wishes,

Alan Plumley
IRS RAS Office of Research

 
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