North Carolina to Collect Taxes on Electricians' Services

The North Carolina legislature has ratified the FY17 budget, which dramatically expands sales tax.

A news report out of Raleigh (11 ABC Eyewitness News) features a local electrician perplexed by the changes to the tax code. He received a letter in November stating that come Jan. 1, he must collect sales tax on his services.

He owns a small business and said that in 20 years he has never taxed anyone. The letter did not offer any guidance on "how to collect tax, how much to collect, what to collect tax on, or where to send it," according the the news report. And the electrician said he doesn't have any systems in place to collect tax and will likely have to lay out money - either up front or ongoing - to satisfy the new requirement from the state.

The change is part of a broader effort to reduce corporate and personal income taxes. That effort began with the expansion of the number of goods and services taxed and starting next year, will further expand to include most repair, maintenance, and installation services, the news report stated.

There are exemptions including some home inspections, landscaping, some alterations on clothes, pest control, moving, and self-service car washes.