On Jan 12, 12:42*pm, Ian Pilcher <arequip...[at]gmail.com> wrote:
- quote -


Ian, I disagree with Harlan on this one (which is unusual, BTW), based
on the Texas law. In many states, a contractor is the consumer of
materials used in constructing or improving real property, so the
contractor is the sales taxpayer. But Texas is different.

Under Texas law, if a contract for the repair, improvement,
maintenance or remodeling of real property is written as a lump-sum
price, the contractor is the consumer of the tangible personal
property that is incorporated into the structure. However, if the
contract is not for a lump sum, the contractor is the retailer of the
tangible personal property. That means the customer is the consumer
and pays the sales tax. Since your contract was itemized, YOU paid
the sales tax, just as you would have done if you had gone to Home
Depot and purchased the windows yourself. This is pursuant to Tex.
Tax Code Ann. §151.056(b) and Tex. Admin. Code §3.291(b)(4)(A), in
case you need to look it up.

Now, whether the window replacement constutes a "major renovation" of
the property is another question. But I think you are over the "did I
pay the sales tax" hump.

Katie in San Diego

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Harlan Lunsford wrote:
- quote -

Well poopers! (But glad I asked.)

Thanks!

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Ian Pilcher arequipeno[at]gmail.com
================================================== ======================

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Gil Faver wrote:
- quote -

That is what I was getting at of course. "Major renovation" to me
suggests additions, renewing foundations, etc.
- quote -

Two ways to handle the deal. 1. I could hire a contractor and let him
buy materials (whether or not as my agent per state law), or 2. (and
this is always my choice), hire the contractor and have him give me a
list of what he needs and I then go to Home Depot or local store and pay
for them (think air miles!) and have them delivered before contractor
arrives.

ChEAr$,
Harlan Lunsford, EA n LA

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"Harlan Lunsford" <hnslunsford[at]bellsouth.net> wrote in message
news:jcShj.50658$_m.1363[at]bignews4.bellsouth.net...
- quote -


If it does NOT qualify as a "major renovation" (I don't think it does), then
it is deductible as sales taxes without the special consideration on page 4,
no?

And, even if it IS a "major renovation", you only need any ONE of the three
choices a, b, c shown on page 4.

What the heck does "paid the sales taxes DIRECTLY" mean?

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Ian Pilcher wrote:
- quote -

take a look at IRS publication 600, page 4. You can only deduct this
sales tax (assuming it qualifies as a major renovation whateverinthehell
that means) AND under state law, your contractor is considered your
agent. A mere quote sheet like contractors many times use is not
sufficient. There must be a contract which officially states that
contractor IS your agent.

So if you still qualify, great!

ChEAr$,
Harlan Lunsford, EA n LA

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On Jan 11, 9:32*am, Ian Pilcher <arequip...[at]gmail.com> wrote:
- quote -


You could be conservative and prorate the $547.66 between the taxable
and nontaxable (labor) parts of the contract, and recalculate the
sales tax on that basis. By my calculation, that would give you a
deduction of $661.45.

However, it's entirely possible that the seller offset the price
reduction solely against the installation labor; they'd already given
you a discount against the material price. Technically, the amount
you are entitled to deduct should be the same as the amount the seller
paid over to the state on your transaction. They might be willing to
give you that information, but considering the small difference, I'd
be inclined to deduct the entire $693.

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I live in Texas, so I'll be deducting state and local sales taxes on my
2007 return. In addition to the estimated taxes, I will deduct the
sales taxes I paid when I replaced my windows in 2007.

The original quote looks like this:

Material Sub-Total $ 11,202.04
Cash & Qty Discount 2,800.51
-----------
Taxable Total 8,401.53
Sales TAX 693.13
Installation Labor 3,480.00
-----------
Cash or Check Price $ 12,574.66
===========

Ultimately, we negotiated a price of $12,000 (paid with a credit card).
We did not, however, receive an itemized quote showing the $12,000
price. The sales representative simply changed the bottom-line price on
the quote and initialed it.

How should I calculate the amount of sales tax to deduct?

Thanks!

--
================================================== ======================
Ian Pilcher arequipeno[at]gmail.com
================================================== ======================

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