Bill Text: NC H726 | 2017-2018 | Regular Session | Amended
Bill Title: Repeal Sales Tax on RMI
Spectrum: Slight Partisan Bill (Democrat 11-5)
Status: (Introduced - Dead) 2017-04-11 - Ref To Com On Rules, Calendar, and Operations of the House [H726 Detail]
Download: North_Carolina-2017-H726-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2017
H 1
HOUSE BILL 726
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Short Title: Repeal Sales Tax on RMI. |
(Public) |
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Sponsors: |
Representatives Blust, Setzer, and Henson (Primary Sponsors). For a complete list of sponsors, refer to the North Carolina General Assembly web site. |
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Referred to: |
Rules, Calendar, and Operations of the House |
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April 11, 2017
A BILL TO BE ENTITLED
AN ACT to repeal the sales and use tax on repairs, maintenance, and installation services.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3. Definitions.
The following definitions apply in this Article:
…
(33e) Real property contract. – A contract between a real property contractor and another person to do any one or more of the following:
a. To perform construction, reconstruction, or
remodeling with respect to a capital improvement to real property.installation,
repair, or any other service with respect to real property.
b. To furnish tangible personal property to be installed or applied to real property and the labor to install or apply the tangible personal property that becomes part of real property.
c. To provide the labor to install or apply the tangible personal property that becomes part of real property.
…
(33i) Repair, maintenance, and installation services. –
The term includes the activities listed in this subdivision and applies to
tangible personal property, motor vehicle, digital property, and real property
except tangible personal property or digital property installed or applied by a
real property contractor pursuant to a real property contract taxed in
accordance with G.S. 105‑164.4H:
a. To keep or attempt to keep property or a motor
vehicle in working order to avoid breakdown and prevent deterioration or
repairs. Examples include to clean, wash, or polish property.
b. To calibrate, refinish, restore, or attempt to
calibrate, refinish, or restore property or a motor vehicle to proper working
order or good condition. This activity may include replacing or putting
together what is torn or broken.
c. To troubleshoot, identify, or attempt to
identify the source of a problem for the purpose of determining what is needed
to restore property or a motor vehicle to proper working order or good
condition.
d. To install, apply, connect, adjust, or set into
position tangible personal property, digital property, or a motor vehicle.
e. To inspect or monitor property or a motor
vehicle, but does not include security or similar monitoring services for real
property.
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(35) Retailer. – Any of the following persons:
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b. A person, other than a
real property contractor, person engaged in business of delivering,
erecting, installing, or applying tangible personal property or digital
property for use in this State.State that does not become part of
real property.
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(38b) Service contract. – A
contract where the obligor under the contract agrees to maintain, monitor,
inspect, or repair digital property or tangible personal property for a period
of time or some other defined measure, regardless of whether the property
becomes a part of or is applied to real property. The term does not include a
single repair, maintenance, or installation service. The term includes a
service contract for a pool, fish tank, or similar aquatic feature and a home
warranty. measure. Examples include a warranty agreement other than
a manufacturer's warranty or dealer's warranty provided at no charge to the
purchaser, an extended warranty agreement, a maintenance agreement, a repair
contract, or a similar agreement or contract.
…."
SECTION 2. G.S. 105‑164.4(a) reads as rewritten:
"(a) A privilege tax is imposed on a retailer engaged in business in the State at the percentage rates of the retailer's net taxable sales or gross receipts, listed in this subsection. The general rate of tax is four and three‑quarters percent (4.75%). The percentage rates are as follows:
…
(13) The general rate of tax
applies to the sales price of an item or service subject to tax under this
Article tangible personal property sold to a real property
contractor for use by the real property contractor or to fulfill a real property
contract. These sales are taxed in accordance with G.S. 105‑164.4H.
…
(16) The general rate applies to the sales price of or
the gross receipts derived from repair, maintenance, and installation services
and includes any tangible personal property or digital property that becomes a
part of or is applied to a purchaser's property."
SECTION 3. G.S. 105‑164.4H(d) and (e) are repealed.
SECTION 4. G.S. 105‑164.4I(b) reads as rewritten:
"(b) Exemptions. – The tax imposed by this section does not apply to the sales price of or the gross receipts derived from a service contract applicable to any of the following items:
(1) An item exempt from tax
under this Article. This exemption does not apply to water maintained under
a service contract for a pool, fish tank, or similar aquatic feature.
…
(7) Repair, maintenance, and installation services
exempt under G.S. 105‑164.13(61a)."
SECTION 5. G.S. 105‑164.13(49) is reinstated.
SECTION 6. G.S. 105‑164.13(61a), (61c), and (61d) are repealed.
SECTION 7. This act becomes effective July 1, 2017, and applies to sales made on or after that date.
