3.2.07

Can somebody explain what this says?

Excerpt from Publication 525, Internal Revenue Service:
State tax refund. [...] you must include in your income the full amount of a refund of state or local income tax or general sales tax if the excess of the tax you deducted over the tax you did not deduct is more than the refund of the tax deducted.
Yeah, and this guide was supposedly written for laypeople.