Sales tax deduction on building materials in IL

[mbp]

I live in Illinois and hired a contractor to build a small house for me last year. The IRS web site (pub. 600) states I can deduct local and state sales taxes on building materials IF under my state law, the contractor is my "agent." It also says a contract must state that the contractor has to get permission from the buyer/owner when making construction decisions, which was the case for my house.

I don't know exactly what the term "agent" means, and I can't find information about what Illinois law is on this topic. Can anyone help me out? My contractor told me he has already deducted all the local and state sales taxes on his federal return, and that his accountant told me I can't deduct them. If I could, it would really add up! I don't make a ton of money (I work for a public radio station!), and I could pay off part of the principle on my mortgage. Thanks!What is the name of your state?

 

[seniorjudge]

You are asking mixed Illinois and Federal questions.

You are very confused.

Hire a tax CPA who knows both Illinois and Federal tax law to answer your questions; it could be worth a ton of money to you.

BUT if the contractor has already paid the sales tax, then it sounds like you are out of luck.

(Talk to that CPA...I know nothing about taxes.)

 

[LdiJ]

I live in Illinois and hired a contractor to build a small house for me last year. The IRS web site (pub. 600) states I can deduct local and state sales taxes on building materials IF under my state law, the contractor is my "agent." It also says a contract must state that the contractor has to get permission from the buyer/owner when making construction decisions, which was the case for my house.

I don't know exactly what the term "agent" means, and I can't find information about what Illinois law is on this topic. Can anyone help me out? My contractor told me he has already deducted all the local and state sales taxes on his federal return, and that his accountant told me I can't deduct them. If I could, it would really add up! I don't make a ton of money (I work for a public radio station!), and I could pay off part of the principle on my mortgage. Thanks!What is the name of your state?

You need to consult a local tax professional, because that is a very state specific question.

However, I honestly can't imagine that you would be able to make those deductions.