What Builders Need to Know About the New North Carolina Sales & Use Tax

North Carolina residents and businesses will being paying sales tax on repair and maintenance services this week, and professionals in the building and remodeling industry need to be aware of how the new state levy may effect them.

Effective March 1, 2016, the 4.75% general State sales tax, and the applicable local sales tax, will apply to the sales price (or the gross receipts) derived from repair, maintenance, and installation services with respect to tangible personal property. This change expands the sales tax to certain services that were previously not subject to it. In addition, effective March 1, 2016, a second change relates to the sales price of tangible personal property where the retailer makes a separate charge for labor for installation. Where the sales tax is now due on labor for installation (see below), it does not matter that the installation charge is or is not stated separately.
These changes do NOT impose the sales tax on ALL construction labor, as some have claimed. Rather, the sales tax is extended to labor performed only under certain LIMITED circumstances.

North Carolina Home Builders Association (NCHBA) Executive Vice President and General Counsel Mike Carpenter
prepared a memo to help NCHBA members understand the upcoming changes, outlining the following:

  • How the changes apply to residential construction from a builder’s perspective, including when sales tax may be due.
  • How about contracts entered into prior to March 1, 2016?
  • What position NCHBA took on this legislation when it was being considered?

Download the NCHBA Memo on the Sales Tax Changes HERE.

Source: NCHBA

Huntersville Planning Commission Rejects Compromise Language on Residential Aesthetic Changes

The Huntersville Planning Commission last night voted unanimously to recommend approval of an ordinance to amend the Town’s residential aesthetic requirements, but in a manner that REBIC believes is insufficient to comply with a new state law.

In making its recommendation, the commission rejected an alternative proposal agreed upon by REBIC and Town planners than would have further reduced requirements for the construction of alleys in single-family neighborhoods. Commissioners argued that town’s aesthetic appeal would be negatively impacted by the allowance of front-entry garages on lots 50′ or wider, effectively challenging the General Assembly to take further action to limit their authority. Continue reading

Economic Development Committee Receives Presentation on Proposed Regulatory Fee Hikes

Earlier this week, members of Charlotte’s Economic Development Committee received a presentation from staff regarding proposed changes to certain land development fees.

In 2006, the Charlotte City Council adopted a policy that it would aim for  100% cost recovery on all regulatory user fees.  Shortly thereafter, in the midst of the recession, the City determined it would not be prudent to substantially increase fees on the development industry, and the proposal was shelved.

But during last year’s preliminary budget discussions, staff reminded Council of its nine-year-old policy regarding cost recovery, and recommended that fees go up accordingly.  After REBIC expressed concerns about potentially staggering jumps in the cost of rezoning and land development fees,, the City acquiesced and imposed some less dramatic increases, capping cost recovery at 80%.

As staff is preparing its FY 16 budget recommendations to Council, they are suggesting it adopt a budget that increases most land development and rezoning fees to a level that recoups 100% of the cost of service.  In some instances fees would actually decrease, but in many others, they would go up.  Here are some examples:

Conventional Rezoning (Residential to Commercial) ⇑15%

Minor Conditional Rezoning (3 acre site) ⇑15%

Major Conditional Rezoning (10 acres or 2,500 trips/day) ⇑40%

Commercial Site Development (3 acres denuded, 10 trees) ⇓9%

Commercial Subdivision (23 acres, 80 trees) ⇓13%

Single-Family Subdivision (10 acres, 10 denuded acres, 40 lots) ⇓5%

Staff is making a concerted effort to get in front of those in the development industry who are paying the fees.  Several meetings will be held in March and here is the schedule:

Wednesday, March 9th, 12:00-1:00, NAIOP, Charlotte Mecklenburg Government Center, Rm CH-14

Wednesday, March 9th, 1:30 – 3 p.m., Development Services Technical Advisory Committee (DSTAC), Charlotte Mecklenburg Government Center, Rm 136

Wednesday, March 16th, 11:00-12:00, Greater Charlotte Apartment Association, Charlotte Mecklenburg Government Center, Rm 136

Thursday, March 17th, 2:00-4:00, Charlotte Water Environment Services Committee, 4222 Westmont, Charlotte

Wednesday, March 23rd, 8:00-9:00, Charlotte Chamber Land Use Committee, 330 South Tryon, Charlotte

City Council is expected to vote June 13th on a final FY 2016-2017 budget. REBIC will continue to work with staff and members of the City Council on this critical issue.

 

Code Enforcement Announces Service Improvements

Mecklenburg County recently released an update that provides next steps following the release of the Gartner Report. In February 2014, development services departments in Mecklenburg County, the City of Charlotte, and the surrounding Towns concurred there were opportunities to enhance services and improve collaboration to provide more seamless service delivery. Click here to view the report.

(Source: Mecklenburg County Code Enforcement)

 

NAR Weighs in on Flood Insurance

On January 7, 2016, the House of Representatives held the first in a series of roundtables and hearings on the National Flood Insurance Program (NFIP). The program must be reauthorized before September 30, 2017 in order to keep selling flood insurance.

No legislation has been introduced. The purpose of these hearings was to begin soliciting ideas for how to restructure the NFIP with the goal of developing comprehensive reform legislation before the end of the year.

NAR was ably represented at the first of these meetings, focused on flood mapping, by NAR Insurance Committee Chair Maria Wells. She urged Congress to improve the accuracy of the flood maps so fewer property owners have to bear the cost of an appeal.

NAR also submitted two letters for the other hearings, one laying out NAR member priorities for long-term NFIP reauthorization/reform, and one regarding private market flood insurance.

NAR’s letter on NFIP reauthorization

NAR’s letter on private market flood insurance

Storm Water Advisory Committee Recommends Phased Reduction of Commercial Fee Credits

The Charlotte Mecklenburg Storm Water Advisory Committee (SWAC) recently approved a recommendation that would gradually phase down storm water fee credits for hundreds of commercial property owners — a dramatic improvement over a staff proposal that would have reduced the credits much sooner.

Under SWAC’s recommendation, credits for all commercial properties would be capped at 86% for the next three years, after which the cap would drop to 72%. While this would result in higher stormwater fees for many commercial property owners, the increase would be much less than under the original proposal. Continue reading

Governor McCrory Recognizes NC Realtors® Support of NC CONNECT Bond Campaign

McCrory Bond

Courtesy NCAR

Governor Pat McCrory visited the Greensboro headquarters of the North Carolina Association of Realtors® (NCAR) this week to thank members and staff for their support of the Connect NC bond initiative, which voters will be asked to endorse when they go to the polls on March 15th.

The visit was in recognition of NCAR’s commitment to provide $150,000 in financial and in-kind contributions to the statewide bond campaign. Continue reading