Another way to look at it is, if the subcontractor wants to claim the ITCs on the expenses that were reimbursed, the subcontractor also has to take the reimbursement as income. The net effect is the same.
It’s all in the logic.
Who is the final payer? The company writing the reimbursement cheque.
Therefore they are the ones entitled to the ITC’s.
The use of the expense is irrelevant - the expense was incurred on behalf of the company writing the reimbursement cheque (final user).
If the subcontractor claims them, then they can’t claim them from the reimbursing company (reduce the invoices) and the reimbursing company doesn’t have a claim. You can see how this can easily become a reporting nightmare. Who’s claiming what? And the auditors would have a heyday handing out assessments in the job from hell…
The legal contract that the subcontractor appears to have with the contractor is that the contractor has authorized the subcontractor to make purchases from Home Depot AS HIS AGENT. Therefor the legal purchaser is the Contractor, and the subcontractor must give the contractor the invoices from Home depot in order that the contractor can properly claim the expense and the ITC of HIS purchase, effected on his behalf by his agent.
The written subcontractor/contractor contract should be read and referenced as necessary