For Immediate Release
May 20, 2005
North Carolina
D.O.R Reminds Taxpayers of Legislative Changes
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 other related questions,
please contact David Rohlmeier, Regional Vice President - Sales & Use
Tax Group at (972) 516-4820. E-mail drohlmeier@thesaltgroup.com
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