North carolina sawmilling sales tax questions

[jovol]

Howdy fellow sawyers,

Does anyone know the rules regarding sales tax and sawmilling in NC? Does the service of milling someone else's logs or resawing boards require sales tax to be collected? And lastly, if I sell boards out of my logs, do I have to charge sales tax (have a feeling that's a yes, but I want to make sure)?

Thanks,
John

[SawyerTed]

I'm NOT a tax expert.  Check with your tax person or CPA.  

If you have a business registered with the Secretary of State and conducting retail sales the short answer is yes tax has to be charged and paid on sales.  

https://files.nc.gov/ncdor/documents/fact-sheets/salesandssetax101.pdf

Look up "business nexus in NC,"  there's some sales tax rules regarding "nexus"   The idea of nexus is that a business does a certain amount of business in the state.  NCDOR doesn't necessarily tell a business about the limits to establish "nexus."

[fluidpowerpro]

Another thing you need to keep track of is any local tax levies, etc to pay for stadiums or whatever. If your mobile, you charge based on where the work is done, not your business address.

[jovol]

I'm NOT a tax expert.  Check with your tax person or CPA. 

If you have a business registered with the Secretary of State and conducting retail sales the short answer is yes tax has to be charged and paid on sales. 

https://files.nc.gov/ncdor/documents/fact-sheets/salesandssetax101.pdf

Look up "business nexus in NC,"  there's some sales tax rules regarding "nexus"  The idea of nexus is that a business does a certain amount of business in the state.  NCDOR doesn't necessarily tell a business about the limits to establish "nexus."

I do have an LLC registered with the NC SoS. I do not have a business license, my understanding is that there is a not a general requirement to have a business license in NC, and my county doesn't require one. I've read a bunch of information online, looks like in 2016 NC starting making sales tax a requirement for some "services" but not all. Haven't read anything that would say sawmill services are subject to sales tax.

[SawyerTed]

The services that are taxable are "installation, maintenance and repair services".   Other services are not.  

[WV Sawmiller]

   Not sure how it works in NC either but I saw for a lot of tax exempt customers who use the lumber for agriculture or resale and they pay no Sales tax but they have to provide me a special WV tax exemption form certifying the purpose of the lumber/service then I am clear and any tax questions will be addressed to the customer. I keep blank copies of the form in my briefcase. I would bet NC has a similar set up so ask the tax gurus when you talk to them.

    The Tax people in WV have been pretty easy to talk to and provided straight forward answers to everything I have asked them. I hope NC is as easy to deal with. 

[Ron Wenrich]

PA has the same ag exemptions.  Commercial operations don't charge sales tax to other commercial operations.  You wouldn't charge sales tax to a pallet operation on blocking, for example.  It may differ in NC.

I would think milling services fall under the income category.  As such, you should get a 1099 Form if the services are over $600.  That's an IRS requirement. 

Best to talk these things over with an accountant.