If you itemize and you choose to deduct sales tax instead of state and local income taxes, you can deduct the sales tax on the building materials - but not the LABOR.
You can deduct the sales tax on your home renovation or construction if all of these conditions apply:
- You're itemizing.
- You're taking the sales tax deduction, as opposed to the state/local income tax deduction.
- The tax rate is equal to your state and local general sales tax rate.
- You (or your contractor acting as your agent) purchased the building materials and paid the tax.
See this TurboTax FAQ
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