North Carolina Exempts Service Contracts for Jets

Jan 27, 2016 | Gail Cole

The North Carolina exemption for services on jet engines took effect October 1, 2015.

Service contracts for qualified jet engines are exempt from North Carolina sales and use tax effective October 1, 2015.

A “qualified jet engine” is defined as an “engine certified pursuant to Part 33 of Title 14 of the Code of Federal Regulations.” Examples of a service contract include, but are not limited to, the following:

Maintenance agreement
Repair contract
Warranty agreement or extended warranty agreement (not those provided at no charge to the purchaser)

North Carolina Department of Revenue Form E-505 originally listed the effective date of this exemption as March 1, 2016. A corrected version of Form E-505 has now been released. It correctly lists the effective date of the exemption for service contracts for jet engines as October 15, 2015. Read Important Notice: Revised Form E-505 Published Online for additional details.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.

Avalara Author

Gail Cole

Avalara Author Gail Cole

Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.