NC Tax Update; Merit Shop Scorecard

ABC of the Carolinas - "The Construction Association of Choice"

North Carolina Tax Update

ABC of the Carolinas would like to note an important tax change. As is always with tax law, the confusion lies within the details. The Repair, Maintenance and Installation Service Tax for Real Property went into effect Jan. 1, meaning that contractors must collect an extra 6.75 to 7.5% for sales tax, depending on location, for labor costs on repairs and certain contracting. The North Carolina Department of Revenue has issued public statements with regards to sales and use tax and how certain contracts and labor will be taxed moving forward. Here is a short list of examples, but we have provided the full length notices below:

*Taxable*	*No Tax*
Fix roofing	Replace roof
Fix siding	Replace all siding
Electrical work	Painting
Install flooring	Kitchen remdel

At this time, ABC of the Carolinas sees the largest concern with contractors who have "maintenance" branches within their company. It appears that repairs and contracts that do not qualify as "capital improvements" will be taxed, while complete renovations/full repairs, and those in which require permits or are deemed as a "capital improvement" will be exempt. ABC Government Affairs staff plans to continue to work with legislators and agency officials to get a full understating of the new law's implementation and will advise membership on further information as it becomes available. We also may look to support extending the exemption period until legislators and regulators can take a second look at the roll-out. Should ABC members have additional questions, please direct them to our Director of Government Affairs at [email protected].

Our government affairs staff request your feedback as you see the changes influencing your businesses.

Click here for more information on what qualifies as a repair and is subject to a new service tax.

Click here for rules regarding "real property contracts".

Click here for rules regarding "capital improvement" and how it's defined.

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Building America: The Merit Shop Scorecard

Associated Builders and Contractors (ABC) today released its annual update to " Building America: The Merit Shop Scorecard," which reviews and grades state-specific policies and information significant to the success of the commercial and industrial construction industry. The scorecard highlights states that have created a free enterprise-based environment where merit shop contractors are well positioned to succeed and calls attention to states where strategic improvements need to be made.

The Merit Shop Scorecard grades states on their policies on prevailing wage and project labor agreement (PLA) mandates and Right to Work status, as well as their construction job growth rate, commitment to developing a well-trained workforce, career and technical education (CTE) opportunities and results, and use of public-private partnerships (P3s).

To continue reading, click here.

ABC Urges President-Elect Donald Trump to Reinstitute

Government Neutrality in Federal Construction

ABC President and CEO Michael Bellaman sent President-elect Trump a letter urging him to guarantee government neutrality in federal construction contracting on January 4. The letter urged President-elect Trump to rescind President Obama's Executive Order 13502, which encourages federal agencies to require project labor agreements (PLAs) on federal contracts to build projects of $25 million or more on a case-by-case basis, and replace it with the executive orders 13202 and 13208, which prohibit PLAs from being required on federal and federally assisted construction projects.

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Nonresidential Construction Spending Gains Momentum

Nonresidential construction spending totaled $699.7 billion on a seasonally adjusted, annualized basis in October, a 0.3 percent decrease from September's significantly upwardly revised total, but an increase of 2.6 percent year-over-year according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC).

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