How to invoice in North Carolina

Repair, maintenance and installation are taxed

North Carolina’s state sales tax is 4.75 percent, and counties add more. In 2016 the state extended the tax to repair, maintenance and installation services on tangible personal property, so labor to fix an appliance, a vehicle or equipment is generally taxable. Repair, maintenance and installation work on real property can also be taxable, while a capital improvement generally is not, with the contractor generally paying tax on materials.

The Department of Revenue publishes guidance on which jobs fall where, and it turns on what is being repaired and how you bill. When tax applies, itemize it so your customer sees the base price, the tax and the total.

Licensing runs through separate boards

The North Carolina Licensing Board for General Contractors licenses general contractors once a single project reaches a statutory dollar limit, widely reported as $40,000. Check the board’s website for the current figure, and do not split a project to stay under it. Plumbing, heating and fire sprinkler contractors have their own board, and electrical contractors have another.

If you hold a licence, print the number on invoices and estimates. Paylark’s licence field takes any text and any label.

Registering to collect tax

A business that sells taxable goods or services in North Carolina registers with the Department of Revenue to collect sales tax, and files returns on the schedule the department assigns. The state also publishes a list of local rates by county, and the rate that applies is based on where the customer takes delivery, which for a repair job is usually the job site.

Because repair and installation labor can be taxable while construction work on a building is treated differently, a contractor who does both should keep two kinds of invoice or at least separate lines. A bill that mixes a taxable appliance repair with a bathroom remodel in one lump sum is the kind of invoice that causes questions later.

Keep a copy of each invoice and each customer’s exemption certificate, if they claim one, for as long as the department tells you to keep records. The invoices you send from Paylark can be exported when you need them.

Invoice checklist

• Business name, address, phone and licence number if you hold one.
• Customer name and the job address.
• Invoice number, date and due date.
• Parts and labor separately, and the tax line when it applies.
• Payment details, and deposits received.

Deposits and late fees

We do not state a deposit limit or a late-fee cap for North Carolina: check local rules, and put the terms you agree on in writing on the estimate. The late fee calculator shows what a given fee adds up to.

Next

Pages for contractors, HVAC and electricians show how each trade can invoice from a phone, the pricing is on one page, and the demo takes 30 seconds. General information, not legal or tax advice.

Official sources

Check the rules with the people who write them:

• North Carolina Department of Revenue: ncdor.gov
• NC Licensing Board for General Contractors: nclbgc.org

Rules change and this page is a starting point. Confirm with your state revenue department and licensing board before you rely on it.