North Carolina Sales Tax on Optional Maintenance Contracts North Carolina: Sales Tax Handbook

North Carolina:

Are Optional Maintenance Contracts subject to sales tax?

While North Carolina's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of optional maintenance contracts in North Carolina, including parts purchased for use in performing service under optional maintenance contracts. To learn more, see a full list of taxable and tax-exempt items in North Carolina.

General Optional Maintenance Contracts
In the state of North Carolina, the optional service contracts are subject to the general tax rate, so long as the contracts meet the official definition of service contract.

Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts
In the state of North Carolina, an item which is used to maintain or repair tangible personal property pursuant to a service contract is considered to be exempt, so long as the purchaser of the contract is not charged for the item.

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