NC Senate Passes Legislation to Clarify Taxation of Property Management Contracts
Category: Legislative
Jun
26
Posted June 26, 2019
The North Carolina Senate this week advanced legislation supported by REBIC, the North Carolina Association of Realtors® (NCR), NAIOP Charlotte, and other industry trade groups that would clarify that residential and commercial Property Management agreements are largely not subject to the state’s Repair, Maintenance & Installation (RMI) sales tax.
SB 523 — Revenue Laws Clarifying & Administrative Changes, passed the Senate on Thursday with an amendment that requires Property Management companies to charge and remit RMI sales tax only in the following circumstances:
- They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
- They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
- More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.
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