Posted June 17, 2019
Last week saw multiple pieces of legislation receive consideration.
House Bill 131 “Repeal Map Act.” received final approval by the Senate on Wednesday. It has now been sent to the Governor for his signature. As we discussed last week, this legislation would formally repeal the state’s Map Act which has been in place for more than thirty years. Enacted initially to give the Department of Transportation the ability to identify land to be used in future transportation corridors, it has been found to have been used to hold lands in perpetuity with no just compensation to the property owner nor actual projects being scheduled/funded. If approved by the Governor, this will be a significant win for property rights in North Carolina.
Senate Bill 573 “Revenue Laws Clarifying & Administrative Changes” received a favorable report from the Senate Finance and Senate Rules committees this week. Included in this 41-page bill are additional clarifications to the repair, maintenance, and installation (RMI) tax requirements in response to our advocacy on behalf of residential and commercial property managers. The legislation exempts certain RMI from taxation when performed by a property management company and clarifies when the taxes are required to be collected. Specifically, the bill requires property management companies to charge and remit RMI sales tax only in the following circumstances:
- They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
- They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
- More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.