New Sales Tax On Service Contracts

Effective January 1, 2014, businesses providing service contracts, including warranty agreements, maintenance agreements, repair contracts or similar agreements should carefully consider whether their contracts will be subject to NC sales tax.  If applicable, sales tax will apply to the sales price of a service contract sold by a retailer on or after January 1, 2014, and sourced to the state of NC.   For more information, the NC Department of Revenue has issued a directive on service contracts.