State government charges, such as fees paid to the Secretary of State for business registration or annual reports, are deductible as business expenses. These charges are considered necessary and ordinary expenses for maintaining or establishing a business. Ensure that the fees are directly related to your business operations, whether for setting up a new business or maintaining an existing one. Keep receipts or payment confirmations as part of your tax records for compliance with IRS regulations. If your business involves maintaining a legal status or filing annual reports, these fees are a standard part of doing business and can help lower your taxable income. Keep records of any state fees that relate to your business operations to ensure you claim them appropriately during tax season.