I built a house as my own contractor. Can I write off the sales tax for the full total of the electrician, they didn't separate labor from materials?

[kubilak]

Can I include in my sales tax deductions all items I paid sales tax on during the year or only items that are within the criteria under "type of major purchase"?

[Opus 17 · Accepted solution]

The issue is in two parts.  You can deduct sales tax on building materials and your contractor services if those taxes are specifically listed and if they are charged at the same rate as general sales tax.  If there is a different rate for building projects, or if the tax is not split out on your invoice, you can't deduct it, even if you think you have a reasonable method of calculating it.  (Note for example, in New York state, a contractor charges sales tax on repairs but improvements are tax exempt.  The contractor still has to pay sales tax on materials but can pass that on to the customer.  You can only deduct sales tax if it is separately listed.)

Second, you need to be keeping records of all your materials and labor costs so you will be able to determine the cost basis of the home.  This is part of the determination of whether you have a taxable gain when you sell the home.  If you take a tax deduction for the sales tax, then do not include the sales tax as part of your building cost when figuring your cost basis.  (Because otherwise that's double dipping.)

[bwa]

The term "major purchase" is a misnomer.  You can deduct sales tax in addition to the IRS tables on home building materials, if the tax rate was the same as the general sales tax rate.That would seem to include all of the costs so long as you have invoices showing separately billed sales tax.