Taxes increase for car repair work in North Carolina on March 1, 2016. The additional tax was included in the state budget that was signed by the governor in late September 2015.
As the law currently stands, car repair service providers in North Carolina charge and pay sales taxes on parts, but service is non-taxable. On and after March 1, 2016, both parts and labor will be taxable items. The cost to repair vehicle damage will inherently be greater as a result of the new tax requirement, which means accident insurance claims for car repairs will likely rise as a result.
North Carolina accident victims who seek to repair damaged vehicles are not the only individuals affected by the new car repair tax increase. Sales tax will also apply to labor for simply auto maintenance work, like oil changes.
Individuals should not be surprised if they see taxed labor fees for auto repairs after March 1st next year, however, there are some instances when dealerships should not impose fees. Unrelated to the recent state budget changes, some dealerships might try to charge vehicle owners for repairs required for auto parts that are included in a safety recall. At the following link, our Raleigh injury lawyers explain more about fees for the repair of recalled auto parts.