Part I.

Amends GS 105-164.4, which imposes a 4.75% privilege tax on retailers by no longer applying the tax to the sales price of or gross receipts derived from (1) repair, maintenance, and installation services to tangible personal property or digital property; (2) service contracts; and (3) repair, maintenance, and installation services for real property.

Amends GS 105-164.4B by removing references to services; specifies that the gross receipts derived from the renewal of a service contract for prewritten software is generally sourced where the purchaser can potentially first make use of the prewritten software.

Amend GS 105-164.4D, concerning bundled transactions, by removing provisions related to bundles that include a service.

Amends GS 105-164.4H, applicable when the consumer is a real property contractor, by removing provisions related to services; removes the provision for the taxation of a mixed transaction contract.

Repeals GS 105-164.4I, concerning taxation of service contracts.

Amends GS 105-164.4J, concerning marketplace-facilitated sales, by removing refences to "service contracts facilitators."

Amends GS 105-164.4K by removing the provisions governing the taxation of services under a property management contract. Makes conforming changes.

Amends GS 105-164.6, complementary use tax, by no longer applying the tax to services.

Amends GS 105-164.11A, by removing references to "cancelled service," to now allow a retailer a refund of sales tax on a rescinded sale only. Makes conforming changes.

Amends GS 105-164.12B, concerning tangible personal property sold below cost as part of a conditional contract, by removing provisions related to service contracts.

Repeals GS 105-164.13A, concerning when a portion of a service charge imposed on food, beverages, or prepared food is exempt from taxation.

Amends GS 105-164.14 by removing provisions related to refunds of taxes paid on service contracts and repair, maintenance, and installation services.

Amends GS 105-164.20 by removing reporting requirements for gross receipts from a retailer selling a service contract.

Amends GS 105-164.26 by removing the presumption related to the evasion of taxes for services.

Amends GS 105-164.27A by removing triggers for the payment of tax under a general direct pay permit related to services, including repair, maintenance, and installation services. Makes conforming changes.

Amends GS 105-187.5 concerning the taxation of the portion of a limited possession commitment billing or payment that represents an amount applicable to the price of a service contract.

Amends GS 105-237.1, concerning when the Secretary of Revenue may compromise a taxpayer’s liability, by removing provisions related to service contracts and repair, maintenance, and installation services.

Amends GS 105-467 by removing the provision related to a refund of sales tax on a rescinded service contract.

Part II.

Amends GS 105-164.13, by removing provisions that exempted the following from sales tax: computer software or digital property service; interior design services; motor vehicle service contracts; repair, maintenance, and installation services and 17 specified types of service contracts; installation charges separately stated on an invoice related to installation charges part of the sales price of tangible personal property purchased by a real property contractor to fulfill a real property contract; installation charges that are part of the sales price of the repair, maintenance, and installation services or installation charges only purchased by a real property contractor to fulfill a real property contract; an item purchased or used to fulfill a service contract if the purchaser is not charged for the item; specified services for a boat, aircraft, or jet engine; towing services; and sales of digital audio work or digital audiovisual work consisting of nontaxable service content.

Amends GS 105-164.13E, concerning farmer exemptions, by removing provisions related to repair, maintenance, and installation services, as well as specified services.

Amends GS 105-164.13F, concerning wildlife manager exemptions, by removing provisions related to repair, maintenance, and installation services, as well as specified services.

Part III.

Amends definitions in GS 105-164.3 applicable to Article 5, Sales and Use Tax, by removing references to services or to repair, maintenance, and installation services in the terms bundled transaction, capital improvement, facilitator, gross sales, item, nonresident retail or wholesale merchant, real property management services, remodeling, remote sale, and sale or selling. Removes the terms mixed transaction contract; repair, maintenance, and installation services; service contract; and service contract facilitator.

Part IV.

Applies to services provided on or after October 1, 2024.