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I am currently doing a gut renovation of a kitchen and bathroom in Brooklyn. I recently mentioned it to a friend who said that I shouldn’t have to pay sales tax because of something called Capital Improvements. This term was new to me as a first time home owner and renovator. I had a look at the New York State website and it seems that it is true to best of my understanding. My contract with my contractor lists the price for the work on the kitchen and bath and below that list the sales tax which comes to several thousand dollars. Is there any reason why I should have to pay this tax? It is nearing the completion of the job, but still owe about $8000 in contracting fees so sales tax could be deducted from that. How to best approach the subject with the contractor? Any help would be appreciated.