NC: Repair, maintenance, and installation services

If I were a contractor in North Carolina, I might be tempted undercharge for parts and to overcharge for services to try to beat the sales tax system, for the State pretty much tries to tax sales, but not services. (I leave aside how FICA might apply.)

But a proposal, http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v6.pdf, would tax:
“(33e) Repair, maintenance, and installation services. – The term includes the activities listed in this subdivision:
a. Repairing tangible personal property to restore it to proper working order.
b. Maintaining tangible personal property to keep the property in working order, to avoid breakdown, or to prevent unnecessary repairs.
c. Installing tangible personal property.”

This proposal could take away an incentive at the State level to turn A into B, so it works toward simplicity, I think.

Simplicity, in my view, with respect for those who condemn the Revenue Code for its number of pages, can sometimes also result from having many words make light work. People make fun of lawyers for listing terms that overlap or worse like “I sell, assign, transfer, and convey,” but we are trained for overbreadth as opposed to letting something slip through the cracks. Recently, to ease the pain of idleness, I took a look at what some other jurisdictions do. Here are my favorites:

Florida lists:
“adjusting, applying, installing, maintaining, remodeling, or repairing tangible personal property,”
http://dor.myflorida.com/dor/taxes/repair_services_sut.html

Ontario lists:
“install, assemble, dismantle, adjust, repair, or maintain items, or install, configure, modify or upgrade a taxable computer program,”
http://www.rev.gov.on.ca/english/guides/rst/601.html. Among examples listed are battery charging, garment alterations, and for the ice hockey fans, skate sharpening.

And getting down to the capillaries, Ontario taxes “potted plant maintenance, if the planters are moveable.” But not if they are built in, I guess, on the theory that built-in planters are real property rather than personal property. Meanwhile, our Governor’s proposal, reachable via http://www.news-record.com/blog/53964/entry/63759, would raise a whopping $232 million in 2010 from a line item called “Property and Some Personal Services.” I don’t know what that means, but I wonder if it extends to services involving real property – in which case it might cover even solidly anchored potted plants.

“Altering” personal property might be a useful catch-all (I saw this in some jurisdiction’s list, but failed to note where). A seamstress or tailor shouldn’t have to create separate categories for (1) expanding my pants’ waist from 34 to 36, which is not a repair, and (2) repairing a seam that split because I ate so much that the pants burst open.

But maybe that expansion ((1)) is covered by the NC proposal as a service “to prevent unnecessary repairs.” But I don’t know what to make of the word “unnecessary.” If I keep exercising, that repair won’t be necessary. Maybe that’s a thicket we could avoid by saying just “to prevent repairs.”