Taxpayers can take now advantage of state sales tax deductions if they itemize deductions. Those who live in one of seven states without a state income tax may now deduct their state sales tax in tax years 2004 and 2005. Taxpayers in states with state income taxes can choose to deduct whichever tax bill is higher: their income taxes or state sales taxes.

"The state sales tax deduction is great news for consumers," said John Hewitt, CEO of Liberty Tax Service. "Consumers can claim this through actual receipts, or new tables that will be created by the Secretary of the Treasury."

Other highlights of this act will affect small businesses, manufacturing and agribusiness. The Section 179 amount will stay at $100,000 a year for most Section 179 expensing through 2007. Business owners will not be able to depreciate SUVs in one lump sum of $100,000 a year, but they can deduct up to $25,000 for vehicles that weigh under 14,000 pounds.

Do you plan to donate a used car to a nonprofit organization? You may not be able to claim the total "blue book value" of the car. The IRS will place limitations effective December 31, 2004 on the amounts of vehicle donations based on how the charity or nonprofit actually uses the vehicle. If the organization sells the donated vehicle, the donor can claim the sales price or gross proceeds. If the organization uses the vehicle, but doesn't sell it, the taxpayer must have documentation of the vehicle's value.

Liberty Tax Service has over 1,400 offices operating in the United States and Canada in 2004. The company provides free tax advice, free checking of self-prepared returns at each office. This year, Entrepreneur magazine ranked Liberty Tax Service as the 9 th fastest growing franchise opportunity, the 2 nd in the Tax and Accounting industry, one of the top 20 low investment opportunities, and #28 on the overall list of best franchises. Accounting Today magazine ranked Liberty fastest growing on its list of top 100 tax & accounting companies released in March 2004. Liberty Tax Service is ranked #106 on Inc. magazine's 500 22 nd annual ranking of the 500 fastest growing private companies in the United States (Fall 2003).