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If I buy a home improvement through a contractor, can I claim the sales tax that he paid on the materials he bought for my job?

Forum|Forum|7 years ago
June 5, 2019
2 replies
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I had some remodeling done and the contractor didn't charge me sales tax but he paid sales tax on the materials that he put in my house. So in the end I paid the taxes on the materials but I didn't purchase them directly.

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Best answer by TomYoung

First, your contractor shouldn't really have been charged sales taxes in the first place. Sales taxes are charged to the consumer - you in this case - and the contractor should have presented a "resale certificate" to avoid paying the tax.

But at this point you don't get to deduct the sales tax since your contractor paid it and will take the deduction in his "cost of goods sold".

If he hadn't been charged the sales tax then states usually require a self-assessment called a "use tax."

Tom Young

fanfare

Employee

Why do you want to claim a deduction you did not incur ??

T

TomYoungAnswer

Employee

First, your contractor shouldn't really have been charged sales taxes in the first place. Sales taxes are charged to the consumer - you in this case - and the contractor should have presented a "resale certificate" to avoid paying the tax.

But at this point you don't get to deduct the sales tax since your contractor paid it and will take the deduction in his "cost of goods sold".

If he hadn't been charged the sales tax then states usually require a self-assessment called a "use tax."

Tom Young

T

TaxGuyBill

Employee

It seems like it wasn't a "resale", but just services that included the materials. In my State, that is how how it works (the contractors pay sales tax on the materials, but no sales tax is directly paid or owed by the person receiving the construction services).

At any rate, TomYoung is correct that sales taxes are not deductible for you, because you weren't assessed the Sales Tax (the contractor was assessed the Sales Tax)