North Carolina – Repeal of Installation Charges Exemption Effective March 1, 2016

SALT Report 3755 – North Carolina repealed the sales and use tax exemption for installation labor beginning March 1, 2016.

“Effective March 1, 2016, “installation charges” by a retailer to a purchaser as part of the retail sale of tangible personal property, certain digital property, and taxable services are subject to the applicable rate of sales and use tax for the item as set forth in N.C. Gen. Stat. § 105-164.4(a), no matter that the installation charges may be separately stated by the retailer. The term “installation charges” is part of the definition of “sales price” as defined in N.C. Gen. Stat. § 105-164.3(37). N.C. Gen. Stat. § 105-164.3(33) defines the term “purchase price,” in part, as “has the same meaning as the term ‘sales price’ when applied to an item subject to use tax.””

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