Service Contracts

The sales price of or the gross receipts derived from a service contract or the renewal of a service contract sold at retail is subject to the general State and applicable local and transit rates of sales and use tax. A service contract is sourced in accordance with the sourcing principles set forth in N.C. Gen. Stat. § 105-164.4B. The retailer of a service contract is required to collect the tax at the time of the retail sale of the contract and is liable for payment of the tax.

Gross receipts derived from a service contract or the renewal of a service contract and the sales and use tax thereon are to be reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.

Technical Publications for Service Contracts

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