NC Taxpayers may see some unexpected changes to sales and use taxes.
Just when NC Taxpayers thought the reduction in the state sales and use tax rate was a done deal, the NC Legislature has introduced a proposal to make permanent, or extend by two years, the 0.5% temporary increase in the tax. The temporary increase is scheduled to expire July 1, 2005.
The Legislature is also considering including in the sales tax base: sales of candy, cable services, satellite digital audio radio service, voice mail, and sales of warranty agreements, maintenance agreements, repair contracts or similar service agreements or contracts. Sales would be subject to both state and local taxes, currently assessed at 7%.
Under the House version of the legislation, the effective date of these changes would be January 1, 2006. The Senate version would have an effective date of October 1, 2005.
The DOR also reminds Taxpayer that although mill machinery and related parts and accessories will be exempt from sales and use taxes effective January 1, 2006, such items will be subject to a new privilege tax that will be imposed at the rate of 1% of the sales price of the item purchased. The General Assembly is contemplating escalating the effective date to October 1, 2005.
Taxpayers are also reminded of the upcoming Sales Tax Holiday, scheduled to begin Friday, August 1, 2005 and ending Sunday, August 7, 2005. Exempt items typically include clothing ($100 or less per item), school supplies ($100 or less per item), computer sales ($3,500 or less per item), and sports or recreational equipment ($50 or less per item).
If you would like additional information on this topic or have any questions, please contact the firstname.lastname@example.org