16.6 Tenants’ Payment of Taxes
You generally may not deduct a portion of your rent as property taxes. This is so even where state or local law identifies a portion of the rent as being tied to tax increases.
Tenants have been allowed a deduction for property taxes in the following areas: In Hawaii tenants with leases of 15 years or more may deduct the portion of the rent representing taxes. In California, tenants who have their names placed on the tax rolls and who pay the taxes directly to the taxing authority may claim a deduction.
In New York, liability for tax is placed directly on the tenant and the landlord is a collecting agent for paying over the tax to the taxing authorities; the landlord also remains liable for the tax. The IRS ruled that it will not permit tenants to deduct a portion of rent as a payment of taxes.
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