by | Dec 12, 2017 | Blog, Taxes | 0 comments

State and local taxes (SALT) are often more complex than the IRS law and represent one of the largest compliance burdens that a business faces. Set aside [for a moment!] the current plan running through congress right now and that still leaves a range of state and local taxes that the business owner is subject to. Property taxes, occupancy taxes, withholding taxes, unemployment taxes, and often the biggest of all: taxes. Most businesses have to deal with taxes in one way or another and it can be as simple as proving you are exempt from it (increasingly rare) to collecting/paying it for each state your business generates revenue. GP is based in Charlotte, , where the state has seen some major changes to its laws in the past year.

offered a “grace period” to allow businesses affected by the changes to comply fully by 2018, which has ended as of January 2018. While the changes were numerous, the biggest change is the addition of the “labor ” to NC sales collections. In summary, has moved from a sales on “goods” to a sales on “goods and services”. There are still a few services that are not yet subject to sales taxes in NC, but if your business generates revenue from “repair, maintenance, or installation” (“RMI”) services, then the changes directly apply to you.

Repair, maintenance, and installation services for tangible personal property are now subject to the statewide rate, as well as any local sales tax rates. This particularly affects the automotive repair industry, HVAC companies, and many types of contractors. What constitutes an “RMI” service is broadly defined and encompasses virtually every situation that involves labor. As an example, an oil change, an HVAC service call, and a plumbing repair are all subject to sales taxes in NC. Whether the invoice breaks out parts/labor is no longer relevant; sales tax should be changed on the entire invoice. A $100 HVAC service call will now cost $107.25 in Mecklenburg County, $106.75 in Union County, and probably less in SC.

The most complicated change in the laws applies to contractors of every type and industry. In a very general sense, the shift in sales tax collection has changed for contractors by requiring them to pay use tax (same rate as sales tax) on material purchases. Whether the contractor should pay use tax on all of their material purchases or should be charging sales tax to their customer is dependent on a few factors, including whether the customer is another contractor or the general public. If a business sells to [both] other contractors and the general public, it can get even more difficult to determine what gets taxed and who pays it. There are also considerations for those contractors who work on “real property” and if the overall transaction is a “capital improvement”. For example, a company that builds outdoor decks would apply the sales tax differently if they are building a deck for a home builder or if they were building a deck for a homeowner.

If the items discussed above are making your head spin or you have questions about how the laws apply to your business, there is no better time to ask an expert than now. GP is the advisor that can keep your business compliant and potentially save you thousands by making sure you are compliant with law. Our firm serves the major industries affected by these changes and can keep your business on the right track for sales and use tax.

Contact Justin or Gary with any specific questions or for more information. Take our “Sales & Use Tax Quiz” here.


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H. Johns
H. Johns
21:58 13 Jul 19
This firm is absolutely the best that I've dealt with when it comes to CPAs and financial advice. I'd gone to another CPA in the area for help with my small business during tax time, they stopped communicating and I was left with important documentation not filed and a lot of anxiety around what to do. My appointment with Justin was set up quickly and I was in within a couple days to sit down with him. When you first meet him, you get the impression that he's incredibly intelligent and knows what he's talking about. He took the time to me through each and every step that I needed to take to move forward and actually ended up saving me money. I am so grateful to him for his knowledge and professionalism. Total life saver! If you're a small business owner, you should not be taking your time, money or business anywhere else but GP CPA and their crew 🙂read more
Tina Simmons
Tina Simmons
13:38 17 May 19
This team is dedicated to their clients and committed to understanding your business and sharing their knowledge to help you succeed. I love working with these folks, they take the worry and uncertainty out of accounting and taxes!read more
Bravo4 Autowerks
Bravo4 Autowerks
12:55 08 May 19
Gary and his team have been fantastic for me and my business. They respond well to all my questions, are very helpful and of course keep my financials in order. Highly more
Queen City Newborn Care
Queen City Newborn Care
15:57 02 Apr 19
I was drowning before I met Justin. He totally transformed how I run my small business and has gotten me organized in ways I didn't even know were possible. I am so grateful for his advice and suggestions! This company is worth every more
Dennis Bloomberg
Dennis Bloomberg
16:01 26 Mar 19
Unfortunately, I found GMP when my mother passed. She had a trust set up and I had no experience with one. I received excellent advice prior to filing taxes, that allow for the transfer of assets with little tax implication. The tax process was simple for me, Justin took over once he had details and cleared up all question from filing our taxes. Thank you for a job well done!read more
Natalie Knight
Natalie Knight
15:35 21 Nov 18
Prusiensky CPA is up to date on technology. They handcraft a platform that works best for your company's accounting services. We really appreciate how hands on and quick their team is when replaying to any type of correspondence. Simply put, they care and want your company to more
Ashlyn Lelej
Ashlyn Lelej
14:39 21 Nov 18
I highly recommend Justin at Prusiensky, CPA for all of your accounting and tax needs. I've been a client for over two years, and have been consistently impressed with their dedication to helping my business grow and be financially successful. His advice is invaluable. Thank you!read more
Bobby Nguyen
Bobby Nguyen
22:23 20 Nov 18
My partner and I started our very first small business last year. Justin has been a blessing to us. Being new at all of this, we didn’t understand much of how business taxes work. Justin explained and answer all of questions that we have. He took care of everything for us throughout the year and have made life so much easier for us. I couldn’t have asked for a better CPA. Highly recommended!read more
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