Is sales tax deductible against building material and its associated LABOR when it is a major home improvement that increases your home value?

[DawnC]

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