17 NCAC 07B .4603. MOTOR VEHICLE SERVICE BUSINESSES

(a)  Persons engaged in the business of repairing automobiles and other motor vehicles are liable for collecting and remitting the applicable statutory state and local sales or use tax on the sales price of any parts, accessories or other tangible personal property which they furnish in connection with repairing their customers' vehicles.  Charges for labor to install the parts, accessories and similar property are not subject to tax if such charges are separately stated on the customers' invoices and in the vendor's records; otherwise, the total charges are subject to the tax.

(b)  Sales of repair parts, accessories and other tangible personal property to automotive repair shops for resale in connection with repairing their customers' vehicles are not subject to tax when supported by a Streamlined Sales Tax Agreement Certificate of Exemption, Form E-595E.

(c)  Sales of tools, equipment and supplies to automotive repair shops for use in conducting their business are subject to the applicable statutory state and local sales or use tax and vendors making such sales are required to collect and remit same.  Certificates of exemption are not applicable to sales of this nature.  If, in addition to repairing motor vehicles, a repair shop actually makes sales of tools, equipment, supplies, and similar items to its customers, such repair shop may purchase such items under a certificate of exemption.  Vendors selling tools, equipment, supplies and similar items to a repair shop, or similar business which does not ordinarily and customarily engage in reselling such articles at retail shall require from such vendee a certificate of exemption with each order for such articles.  Such vendee is then liable for collecting and remitting the applicable statutory state and local sales or use tax on its sales of tools, equipment, supplies and similar items.

(d)  The total charge for all tangible personal property, including windshields, window glass, seat covers, floor mats, head liners, runners, channels, pig rings, felt, tacks, screws, thread, tape, windlass, welt cord, and similar items installed in or upon motor vehicles or other articles by persons selling and installing such property are subject to the applicable statutory state and local sales or use tax.  The charge for labor performed or other services rendered in installing the same are also subject to the applicable statutory state and local sales or use tax unless such charges are separately stated on the customer's invoice and in the vendor's records.  All tax due hereunder must be collected and remitted to the department by the person selling and performing such installation service.  Sales of tangible personal property for resale in connection with glass repair and reupholstery jobs are not subject to tax when supported by properly executed certificates of exemption; however, any tools, supplies or other property sold for use in performing such work are subject to the applicable statutory state and local sales or use tax.

(e)  Persons engaged in the business of painting or refinishing motor vehicles are the users or consumers of tangible personal property which they purchase for use in the performance of such services.  Sales to such businesses of paint, primer, sandpaper and belts, masking tape, putty and other finishing or refinishing materials, including those named in Paragraph (f) of this Rule, tools, supplies and any other tangible personal property for use in body repair, painting or refinishing work are subject to the applicable statutory state and local sales or use tax.  If, in addition to such body repair, painting or refinishing work, said businesses purchase tangible personal property such as automobile fenders, doors, windshields or other parts or accessories, and sell the same to their customers, such businesses are liable for collecting and remitting the tax on such sales irrespective of whether the sales are made in connection with repair or refinishing jobs.

(f)  Sales of soap, wax, polish, glaze, undercoating, scotchguard, finish protectants and other related materials to motor vehicle dealers and other businesses that use such materials to wash, wax, and/or apply a protective coating to automobiles are subject to the applicable statutory state and local sales or use tax thereon.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.5; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; June 1, 1992; October 1, 1991.