North Carolina Changes How Tax Applies to Repair, Maintenance, and Installation Services
Wednesday, December 28th, 2016
Effective January 1, 2017, North Carolina taxes repair, maintenance, and installation services regardless of who performs them. The state will exempt some services and will not tax construction jobs that fit the definition of "real property contracts."
In March of 2016, North Carolina began to tax repair, maintenance, and installation services. At that time, tax applied to these services when they were performed by businesses that made a majority of their revenue from retail sales. Beginning January 1, 2017, the state will tax these services regardless of who performs them.
"Repair, maintenance, and installation" include many different services. Generally, tax will apply to any service that involves fixing things, cleaning things, putting things into position, or keeping things from breaking. However, the new law exempts some services, including the following:
- Cleaning real property
- Altering or repairing clothing
- Pest control
- Towing vehicles
- Services performed on parking lots, roads, and driveways
- Services performed on items that were purchased exempt from North Carolina sales tax
In addition, the tax does not apply to construction jobs that qualify as real property contracts. "Real property contracts" are new construction or remodeling jobs that involve permanently attaching things to real property. Services that are not taxable because they qualify as real property contracts include these:
- Construction that requires a permit under the state building code
- Installing underground utilities
- Installing multiple items of capital equipment that cannot be removed without causing damage
- Installing roofing, septic tanks, plumbing, electrical, commercial refrigeration, irrigation, sprinkler systems, or other similar systems
- Installing heating or air conditioning units or systems
Note that a single installation service does not qualify as a real property contract. For this reason, a single installation service is generally taxable.
Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.
TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.
TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.
Please visit TTR on the web at www.ttrus.com or call 866.578.8193.
Cleaning of Beer-Tap Lines Not Taxable in Ohio
Monday, January 14th, 2019 -The Supreme Court of Ohio recently ruled that cleaning beer-tap lines is not taxable. The taxpayer was...
Louisiana Court of Appeals Finds Marketplace Facilitators...
Friday, January 11th, 2019 -The Louisiana Court of Appeals has recently addressed the sales tax liability of marketplace facilitators. A c...
Iowa Supreme Court Determines Taxable Carpentry Services...
Wednesday, January 9th, 2019 -The Iowa Supreme Court has recently addressed the taxability of various installation services. The taxpayer wa...
Tax Applies to Metallurgical Coke in Illinois
Monday, January 7th, 2019 -Illinois recently ruled that use tax was due on purchases of metallurgical coke. The taxpayer was a business t...
Connecticut Provides Updated Guidance on Starting a...
Thursday, January 3rd, 2019 -The Connecticut Department of Revenue Services has issued a new information publication for businesses within ...
Pallets Exempt in Tennessee When Used as Packaging, Not...
Wednesday, January 2nd, 2019 -The Tennessee Department of Revenue recently released a sales tax notice addressing pallets and the packaging ...