Repair, Maintenance, and Installation Services; and Other Repair Information

The sales price of or the gross receipts derived from repair, maintenance, and installation services sold at retail is subject to the general State and applicable local and transit rates of sales and use tax. Repair, maintenance, and installation services is defined in N.C. Gen. Stat. § 105-164.3 and are sourced in accordance with the sourcing principles set forth in N.C. Gen. Stat. § 105-164.4B.

The term "installation charges" is part of the definition of "sales price" as defined in N.C. Gen. Stat. § 105-164.3. 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.

Gross receipts derived from repair, maintenance, and installation services and the sales and use tax thereon are to be reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.

Technical Publications for Repair, Maintenance, and Installation Services

• Sales and Use Tax Bulletins - See Repair, Maintenance, and Installation Services Bulletin
• Updated Important Notice:  Sales Tax Base Expansion Protection Act (09-10-18)
• Directive SD-18-1: Repair, Maintenance, and Installation Services for Real Property and Real Property Contracts (4-18-18)
• Important Notice: Purchasers May Elect to Have Seller Collect and Remit Sales and Use Tax on Certain Boat, Aircraft, and Qualified Jet Engine Charges and Services in Lieu of Obtaining a Direct Pay Permit Certificate (10-11-17)
• Important Notice: Sales Tax Base Expansion Protection Act (9-6-17)
• Important Notice: Additional Information Regarding Real Property Contracts and Retails Sales of Repair, Maintenance, and Installation Services to Real Property (3-17-17)
• Important Notice: Transition Issues Relative to Sales and Use Tax Law Changes with Respect to Real Property Contracts; Repair, Maintenance, and Installation Services to Real Property, and Other Items (12-22-16)
• Directive SD-16-4: Repair, Maintenance, and Installation Services (11-15-16)
• Motor Vehicle Repair, Maintenance, and Installation Services; Storage; and Towing Services (11-15-16)
• Important Notice: Direct Pay Permit and Use Tax Exemption for Certain Boat, Aircraft, and Qualified Jet Engine Charges and Services (7-15-16)
• Important Notice: Bookbinding Services (5-25-16)
• Important Notice: Form E-589J Affidavit to Exempt Certain Qualifying Purchases or Charges on or After March 1, 2016 (2-23-16)
• Important Notice: Sales and Use Tax Technical Bulletins and March 1, 2016 Tax Changes (2-22-16)
• Important Notice: Motor Vehicles (Installation Charges; Repair, Maintenance, and Installation Services; and Service Contracts) (2-11-16)
• Directive SD-16-2: Repair, Maintenance, and Installation Services (2-5-16; Rev. 12-22-16)

Other Repair Information

• Directive SD-18-5 Photograph Tint or Color Charges (5-25-18)
• Directive SD-18-4 Charges for Shop Supplies (5-25-18)
• Directive SD-18-3 Gift Wrap Charges and Services (5-25-18)
• Important Notice: Watch, Clock, Jewelry, and Other Item Repair Sales and Services (100% Taxable), Cleaning Sales and Services, and Engraving Charges (1-27-16)
• Important Notice: Tire Recapping or Retreading Sales and Services - 100% Taxable (1-25-16)
• Important Notice: Shoe Repair Services (100% Taxable) and Shoe Polishing Services (1-22-16)
• Important Notice: Repeal of Installation Charges Exemption (1-11-16)