Depends on the age of the carpet. Is it past it's usable life, anyway?
For instance, if the carpet has a usable life of 6 years, and the tenant was there for 6 years, you can't charge them anything for replacing it. You have to prorate the charge according to the life left in it.
As far as the walls, @Sam Erickson I agree with. If they weren't supposed to smoke, you could charge them for any extra work or paint you need to use to get the walls cleaned and painted. But, again, charging for painting a unit also normally needs to be prorated.
The CA Dept of Consumer Affairs has a great website on this issue. I think it's a good guideline for anyone. The following is cut and pasted from the state website:
http://www.dca.ca.gov/publications/landlordbook/se...
1. Costs of cleaning
A landlord may properly deduct from the departing tenant's security deposit to make the rental unit as clean as it was when the tenant moved in.241
A landlord cannot routinely charge each tenant for cleaning carpets, drapes, walls, or windows in order to prepare the rental unit for the next tenancy. Instead, the landlord must look at how well the departing tenant cleaned the rental unit, and may charge cleaning costs only if the departing tenant left the rental unit (or a portion of it) less clean than when he or she moved in. Reasonable cleaning costs would include the cost of such things as eliminating flea infestations left by the tenant's animals, cleaning the oven, removing decals from walls, removing mildew in bathrooms, defrosting the refrigerator, or washing the kitchen floor. But the landlord could not charge for cleaning any of these conditions if they existed at the time that the departing tenant moved in. In addition, the landlord could not charge for the cumulative effects of wear and tear. Suppose, for example, that the tenant had washed the kitchen floor but that it remained dingy because of wax built up over the years. The landlord could not charge the tenant for stripping the built-up wax from the kitchen floor.
The The landlord is allowed to deduct from the tenant's security deposit only the reasonable cost of cleaning the rental unit.242
2. Carpets and drapes - "useful life" rule
Normal wear and tear to carpets, drapes and other furnishings cannot be charged against a tenant's security deposit.243 Normal wear and tear includes simple wearing down of carpet and drapes because of normal use or aging, and includes moderate dirt or spotting. In contrast, large rips or indelible stains justify a deduction from the tenant's security deposit for repairing the carpet or drapes, or replacing them if that is reasonably necessary.
One common method of calculating the deduction for replacement prorates the total cost of replacement so that the tenant pays only for the remaining useful life of the item that the tenant has damaged or destroyed. For example, suppose a tenant has damaged beyond repair an eight-year-old carpet that had a life expectancy of ten years, and that a replacement carpet of similar quality would cost $1,000. The landlord could properly charge only $200 for the two years' worth of life (use) that would have remained if the tenant had not damaged the carpet.
3. Repainting walls
One approach for determining the amount that the landlord can deduct from the tenant's security deposit for repainting, when repainting is necessary, is based on the length of the tenant's stay in the rental unit. This approach assumes that interior paint has a two-year life. (Some landlords assume that interior paint has a life of three years or more.)
Length of stay
Less than 6 months
6 months to 1 year
1 year to 2 years
2 or more years
Deduction
full cost
two-thirds of cost
one-third of cost
no deduction
Using this approach, if the tenant lived in the rental unit for two years or more, the tenant could not be charged for any repainting costs, no matter how dirty the walls were. 244
4. Other damage to walls
Generally, minor marks or nicks in walls are the landlord's responsibility as normal wear and tear (for example, worn paint caused by a sofa against the wall). Therefore, the tenant should not be charged for such marks or nicks. However, a large number of holes in the walls or ceiling that require filling with plaster, or that otherwise require patching and repainting, could justify withholding the cost of repainting from the tenant's security deposit. In this situation, deducting for painting would be more likely to be proper if the rental unit had been painted recently, and less likely to be proper if the rental unit needed repainting anyway. Generally, large marks or paint gouges are the tenant's responsibility.245