You may deduct the sales taxes on a major home improvement if:
1. You elect to deduct state sales taxes instead of state income taxes. And:
2. Either:
a. You itemize the actual sales taxes paid during the tax year. This may include sales taxes on services, like installation.
b. You choose the general sales tax deduction, which is a standard deduction based on your income and location, and you add the sales taxes paid on the remodeling supplies (not labor), not to exceed the amount which would be obtained at the rate of the general sales tax in your area, and if you have any contractor(s), they are all considered your agents under state law, and you are considered to have full control over the ordering of supplies.
If you do a home improvement, you may add the costs of the improvement to the basis of your home, minus any sales taxes already deducted according to the above. This will reduce the capital gains when you sell the home.
Appliances are not considered a part of the home improvement, although the sales taxes paid on them are deductible if you itemize your sales tax deduction on the year that they were bought.
