North Carolina Publishes Important Notice Regarding Jewelry Sales and Services

North Carolina's Important Notice covers the taxability of sales and services (including repairs, cleanings, and engravings) for watches, clocks, jewelry, and other items, effective March 1, 2016.

Jewelry Repair Services - Effective March 1, 2016, 100% of the jewelry repairer’s or other retailer’s sales price of the gross receipts derived from charges for watches, clocks, jewelry, or other items, are taxable. These repair services are subject to the general state, applicable local, and transit sales and use taxes. Any jewelry repairer that is a retailer who provides service must collect the tax on the entire charge to a customer for the jewelry repair service. The tax charges are applicable regardless of whether the item repaired may have been received by the retailer prior to March 1, 2016.  Also, any retailer that does not collect the taxes due from a customer or remit the taxes due to the department remains liable for such taxes.

Cleaning Sales and Services - Effective March 1, 2016, the retailer’s sales price of or the gross receipts derived from cleaning services to clean or restore watches, clocks, jewelry, or other items are taxable. These cleaning services are subject to the general state, and applicable local and transit sales and use taxes. Also, any retailer that does not collect the taxes due from a customer or remit the taxes due to the department remains liable for such taxes. Any person that only provides watch, clock, jewelry, or other item cleaning and does not have any other sales transactions, is not a retailer effective March 1, 2016.  Therefore, this person is not required to collect and remit sales tax on the sales price of or the gross receipts derived from the cleaning services charges.

Engraving Charges - Effective May 1, 2016, charges for the engraving of tangible personal property sold at retail by a retailer, when the tangible personal property was sold, is taxable. The engraving charges are subject to the general state and applicable local and transit sales and use tax rates, unless the property is subject to another tax rate specified in the North Carolina statute and provided that the engraving charges were made when the tangible personal property was sold.

Retail Sales - Charges for watches, clocks, watch band and chains, batteries, trophies, jewelry, and other tangible personal property sold at retail are taxable. These items are subject to the general state, and applicable local and transit sales and use taxes.

Sales tax rates by jurisdiction are changing constantly and continue to grow in complexity. Our end-to-end service model is unique in our industry because it was built with the end result of compliance in mind.  This ensures that the returns and compliance data you submit to the agencies is right the first time — every time.