A BILL TO BE ENTITLED
AN ACT to repeal the sales and use tax on repairs, maintenance, and installation services.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑164.3 reads as rewritten:
"§ 105‑164.3.  Definitions.
The following definitions apply in this Article:
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(33e)	Real property contract. – A contract between a real property contractor and another person to do any one or more of the following:
a.	To perform construction, reconstruction, installation, repair, or any other service with respect to real property.
b.	To furnish tangible personal property to be installed or applied to real property and the labor to install or apply the tangible personal property that becomes part of real property.
c.	To provide the labor to install or apply the tangible personal property that becomes part of real property. 
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(35)	Retailer. – Any of the following persons:
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b.	A person engaged in business of delivering, erecting, installing, or applying tangible personal property or digital property for use in this State that does not become part of real property.
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(38b)	Service contract. – A contract where the obligor under the contract agrees to maintain, monitor, inspect, or repair digital property or tangible personal property for a period of time or some other defined measure. Examples include a warranty agreement other than a manufacturer's warranty or dealer's warranty provided at no charge to the purchaser, an extended warranty agreement, a maintenance agreement, a repair contract, or a similar agreement or contract.
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SECTION 2.  G.S. 105‑164.4(a) reads as rewritten:
"(a)	A privilege tax is imposed on a retailer engaged in business in the State at the percentage rates of the retailer's net taxable sales or gross receipts, listed in this subsection. The general rate of tax is four and three‑quarters percent (4.75%). The percentage rates are as follows:
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(13)	The general rate of tax applies to the sales price of tangible personal property sold to a real property contractor for use by the real property contractor or to fulfill a real property contract. These sales are taxed in accordance with G.S. 105‑164.4H.
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	"
SECTION 3.  G.S. 105‑164.4H(d) and (e) are repealed.
SECTION 4.  G.S. 105‑164.4I(b) reads as rewritten:
"(b)	Exemptions. – The tax imposed by this section does not apply to the sales price of or the gross receipts derived from a service contract applicable to any of the following items:
(1)	An item exempt from tax under this Article.
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SECTION 5.  G.S. 105‑164.13(49) is reinstated.
SECTION 6.  G.S. 105‑164.13(61a), (61c), and (61d) are repealed.
SECTION 7.  This act becomes effective July 1, 2017, and applies to sales made on or after that date.