Bill would end tax on N.C. design services
State had claimed sales tax should be collected
Larry Thomas -- Furniture Today, June 2, 2008
RALEIGH, N.C. — The North Carolina Senate unanimously passed a bill last week that would exempt interior designers from collecting sales tax on consulting services they provide to clients who also buy merchandise from them.
The bill would reverse a policy that the state Department of Revenue has been pursuing in recent years. The department has forced some designers to pay back taxes, penalties and interest on sales tax it claimed they should have collected on consulting fees.
The department had said the designers met the definition of a retailer, and were required to collect the state’s 6.75% sales tax on consulting fees and services provided in conjunction with the purchase of merchandise. Previously, most interior designers had been collecting the tax only on merchandise.
A nearly identical bill has been filed in the North Carolina House and has been referred to that chamber’s finance committee.
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