Ok...California isn't in the lead on this. New York is. There was litigation in the NY Courts that led to what is known as their "Amazon Law" that lets NY force Amazon to collect NY sales tax by virtue of NY based third-party sellers having partnership agreements with Amazon. VT, MA, RI, IL, CO, GA, CT and now CA have since filed legislation to mimic what NY did. THIS DOESN'T mean the states can now compel remote sellers to collect their tax! It only applies where that seller has a partnership agreement with an in-state business pushing sales through their website. THAT said, we all owe the USE TAX. It's the law. I find it interesting that many of the same folks who rail about Democrats trying to raise taxes (which happens to be factually inaccurate) don't seem to care about breaking the law, resulting in budget deficits that leave states short of operating revenue that lead to discussions of the need to raise taxes! You can't complain about your kids getting a crappy education, the roads being bad, bridges failing, etc. if you don't pay the taxes you lawfully owe! That's as unpatriotic as you get. I find it hard to understand how the masses on the right fall for the complete ruse that they will somehow benefit from the Gov't giving tax breaks to the uber-wealthy and to Corporations who are buying those tax breaks with lobbying dollars. It's been proven to be bull time and again. Oil companies are reaping record profits while enjoying ridiculous tax breaks and shifting the burden of the shortfall to the rest of us! PLUS, we now have the privilege of perpetuating their ownership of the U.S. Government by our paying them $5.00/gallon! If you understand anything about investigative tactics in police work..."follow-the-money" almost always leads you back to the perpetrator. While there's plenty of blame to dole out on both sides of the aisle, it doesn't take a genius to figure out which major party is the prime offender. What can be said about this but wake up America! What happened to government for the people, by the people? The Constitution says "people" not "corporations!" As for the uncollected sales tax issue, there is an effort called the Streamlined Sales Tax Project aimed at encouraging Congress to lift the Supreme Court restrictions on requiring remote sellers to collect tax for the states in exchange for the states simplifying and making their laws more uniform so that it doesn't cost businesses so much to comply! Unsurprisingly, the bill continues to stall due to opposition by the majority of Republicans who don't want to be "perceived" as levying new taxes even though the taxes are already legally due and are just being criminally ignored. Thankfully this year there is some Republican support. Rep. Senator Mike Enzi of WY is cosponsoring the bill this session with Senator Richard Durbin of IL. Until REAL campaign finance reform is adopted and publicly funded political campaigns are MANDATORY and Corporate lobbying $ prohibited, this country will NOT be truly free.

I would ask your subs if they charged you any sales tax on the materials they used in your home and if so if you could have that documented on your receipt from them. You need a receipt or invoice that shows what sales tax you are deducting in case you are ever audited. Even the numbers that I backed into on my example I gave above, I went to Lowes and Home Depot afterwards and had them pull up my receipts (one advantage to using a credit card) and print them off so that I would have them for backup in case the IRS ever came looking. States vary greatly on how they determine when sales tax is collected. Does Texas charge sales tax on the sale of a newly constructed home? If so, the builder would be exempt from paying sales tax on material that was used in the building of the home. Therefor your subs may not have charged you any and that is why it is not on their invoice. However, like I said, sales tax law varies greatly from state to state and I wouldn't want to give you advice there as I'm not a Texan. Maybe someone else here knows or you could research it on the internet or ask a local accountant. As far as the cost basis goes, any sales tax you deduct and any energy credits you take will reduce your cost basis. The $250,000/$500,000 exclusion only applies if you have lived in your home more than 2 years. If you sell before then and have a profit you will need to know your cost basis and pay tax on the gain. And after the two years are up if you are lucky enough to have that kind of a gain you will also need to be able to figure your cost basis. So in short just keep good records of all your costs and any tax deductions & credits that you do end up taking. I would still take the sales tax deduction as it is guaranteed benefit to you this year whereas the other is hypothetical and unpredictable and a dollar saved today is always worth more than a dollar saved in the future. The IRS allows a standard deduction for sales tax if you do not have your receipts for all normal daily purchases. Sales tax on construction costs are deductible above and beyond that standard deduction so it can amount to quite a bit. I'd say just ask your subs and see what they can come up with. They may not have charged you any sales tax. If they charged you tax they are responsible for reporting and paying that to the state so they would have records. If they paid sales tax on materials and didn't charge you any sales tax then you are probably out of luck. In theory, sales tax is typically charged to the end user but that isn't how it always works out. And some states charge sales tax on the sale of a home and others do not so if varies on who is considered the end user. Sorry for the long winded explanation. Hope it make sense.

IMHO, you need to be careful claiming the sales tax deduction for sales tax that you personally didn't pay. Is the builder who bought the materials claiming the sales tax as part of his cost of materials on his return? If so, those dollars for sales taxes paid are already being deducted by the builder. If you also deduct the sales tax that the builder paid, then the deduction is being taken twice for the same amount of sales tax. I think the IRS would frown on 2 deductions for the same dollars spent in sales tax. If the builder is paying materials under a tax exempt numer, then reselling those materials to you and charging you sales tax, that amount should be reflected on your invoice as zone 8grandma suggests and would be deductible on your return. I know nothing about Washington sales tax law, but I do believe that that both you and your builder claiming a deduction for the same sales tax would be frowned on by the IRS. Hopefully this makes sense. I've rewritten it several times and am still not sure it's clear what I'm trying to say.

Some places use actual sale prices as the tax valuation, others use an average of sale prices in defined (at least at the tax office) adjusted for amenities (bedrooms, bathrooms, lot area, age of the structure, phase of the moon, whatever method they are allowed to use. Virginia generally requires averaging spread over some method (that the tax office does not want to discuss) but other places use sale prices. One thing that is common in areas that use 'market value' is that they often hold the valuation low enough to avoid a lot of appeals. I have never had a property (VA, NH, and other places) I would sell for the tax appraisal. It makes it hard to argue your valuation is high.