17 NCAC 07B .4403          MAINTENANCE OF LEASED PROPERTY

(a)  Sales of tangible personal property to registered lessors or retailers for the purpose of lease or rental exclusively are wholesale sales and not subject to tax provided completed and executed certificates of resale are furnished to the vendors of such property.  Sales of lubricants, repair parts and accessories to such lessors or retailers who use them to repair, recondition or maintain such leased or rented personal property are also wholesale sales when completed and executed certificates of resale are provided to vendors of this type property.  Lessors are responsible for payment of any applicable statutory state and local tax on the cost price of such items if they are used for a purpose other than repairing or maintaining leased or rented property or if they are resold as such.  Any tax due thereon is to be paid to the Secretary of Revenue on the lessors' or retailers' sales and use tax returns.

(b)  When the lessee purchases lubricants and repair parts to maintain tangible personal property being leased or rented, the lessee is liable for payment of the applicable statutory state and local sales or use tax on the cost price of such purchases to the vendors or to the Secretary of Revenue.  If a separate maintenance agreement for a fixed fee where no separate charge is made for parts and labor is executed by the lessor and lessee whereby the lessor or the lessee agrees, for a consideration separate from the lease payments, to maintain property being leased or rented, purchases of repair parts and lubricants by either party are subject to the tax payable by the purchaser thereof as described in this Rule.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; June 1, 1992; October 1, 1991; March 1, 1984.