Beware Real Property Contractors: NC “White Goods” Tax

Posted on 05.07.15

Beware Real Property Contractors: NC “White Goods” Tax

While likely not a huge issue, this is something good to know, particularly if you’re a real property contractor doing business in North Carolina.

The Department of Revenue has clarified that its “White Goods Disposal Tax” is applicable to new “white goods” purchased for or used in connection with a real property contract on or after January 1, 2015. The tax is $3.00 which is in addition to all other taxes (e.g., sales and use tax) for each new “white good” sold in North Carolina or purchased outside the state and used in real property construction contracts in the state. A “white good” includes refrigerators, freezers, ranges, water heaters, unit air conditioners, washers and dryers, dishwashers, and other similar domestic and commercial large appliances.

Real property contractors are considered the consumers of the new white goods that are installed for others that become part of real property. Thus, they must pay the $3.00 White Goods Disposal Tax at the time of purchase from a North Carolina retailer or self-assess and report the tax directly to the Department of Revenue on white goods purchased outside the state and brought into the state for installation.

Retailer-contractors are liable for collecting and remitting the $3.00 tax for each new white good sold at retail. It is noteworthy that under current interpretations by the state, a retailer-contractor is not liable for the tax on white goods withdrawn from inventory to fulfill a real property contract. However, when that retailer-contractor acts as a real property contractor and purchases a white good from outside the state for use in connection with a real property contract in the state he must self-assess and report the tax. Similarly if the retailer-contractor buys a white good from a North Carolina retailer to fulfill a real property contract, he must pay the $3.00 disposal tax to the retailer at the time of purchase.

A real property contractor, retailer-contractor or other person using or selling white goods in the state must be registered with the Department of Revenue. The White Goods Disposal Tax is reported to the Department on Form E-500H, White Goods Disposal Tax Return. The Form is required to be filed even if there is no tax due for a given reporting period.

If you have questions about this please contact your Keiter state and local tax advisor.

Source: North Carolina Important Notice: White Goods Disposal Tax and Real Property Contractors, 4/28/2015

The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

Posted by: Terry Barrett, CPA

Terry Barrett specializes in state and local tax concerns for her clients. She has over 30 years of experience working in the public and private accounting sector. She is a graduate of Virginia Commonwealth University. You can read more of Terry’s state and local tax insights here.