2nd try - How much sales tax?

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I can't speak for Texas, but before you plan on doing any deducting, take a look at IRS publication 600, page 4. You can only deduct this sales tax (assuming it qualifies as a major renovation whateverinthehell that means) AND under state law, your contractor is considered your agent. A mere quote sheet like contractors many times use is not sufficient. There must be a contract which officially states that contractor IS your agent.

So if you still qualify, great!

ChEAr$, Harlan Lunsford, EA n LA

If it does NOT qualify as a "major renovation" (I don't think it does), then it is deductible as sales taxes without the special consideration on page 4, no?

And, even if it IS a "major renovation", you only need any ONE of the three choices a, b, c shown on page 4.

What the heck does "paid the sales taxes DIRECTLY" mean?

That is what I was getting at of course. "Major renovation" to me suggests additions, renewing foundations, etc.

Two ways to handle the deal. 1. I could hire a contractor and let him buy materials (whether or not as my agent per state law), or 2. (and this is always my choice), hire the contractor and have him give me a list of what he needs and I then go to Home Depot or local store and pay for them (think air miles!) and have them delivered before contractor arrives.

ChEAr$, Harlan Lunsford, EA n LA

Well poopers! (But glad I asked.)

Thanks!

Ian, I disagree with Harlan on this one (which is unusual, BTW), based on the Texas law. In many states, a contractor is the consumer of materials used in constructing or improving real property, so the contractor is the sales taxpayer. But Texas is different.

Under Texas law, if a contract for the repair, improvement, maintenance or remodeling of real property is written as a lump-sum price, the contractor is the consumer of the tangible personal property that is incorporated into the structure. However, if the contract is not for a lump sum, the contractor is the retailer of the tangible personal property. That means the customer is the consumer and pays the sales tax. Since your contract was itemized, YOU paid the sales tax, just as you would have done if you had gone to Home Depot and purchased the windows yourself. This is pursuant to Tex. Tax Code Ann. §151.056(b) and Tex. Admin. Code §3.291(b)(4)(A), in case you need to look it up.

Now, whether the window replacement constutes a "major renovation" of the property is another question. But I think you are over the "did I pay the sales tax" hump.

Katie in San Diego