SALT Tax Alert – North Carolina Expands Taxability of Repair, Maintenance and Installation Services Effective January 1, 2017

The North Carolina General Assembly enacted legislation which made several key changes to the taxability of repair, maintenance and installation (RMI) services performed on tangible personal property and also expanded the tax base to include certain RMI services performed on real property.

Please note that this Tax Alert provides a summary of the law changes and guidance issued by the NC Department of Revenue and is not intended to be a comprehensive overview.

Effective January 1, 2017, the definition for “retail trade” was repealed; therefore, a person’s business classification or majority of revenue no longer affects the taxability of RMI services. Also, effective January 1, 2017, NC sales and use tax will apply to the sales price of or gross receipts derived from many repair, maintenance and installation services performed on real property, unless the transaction meets the definition of a capital improvement (see below for the full details of this tax alert).

Topics covered in this alert include:

  • Capital Improvements
  • Form E-589CI, Affidavit of Capital Improvement
  • Repair, Maintenance and Installation Services Related to Real Property
  • Repair, Maintenance and Installation Services for Tangible Personal Property or a Motor Vehicle
  • Exemptions Related to Repair, Maintenance and Installation Services
  • Retailer-Contractors
  • Purchasing Tangible Personal Property and Digital Property

 

ABOUT THE AUTHORS

GET IN
TOUCH
© Dixon Hughes Goodman LLP. All rights reserved.
DHG is registered in the U.S. Patent and Trademark Office to Dixon Hughes Goodman LLP.
praxity