North Carolina Sales Tax on Home Improvement (2026): Remodel or Repair
When a North Carolina contractor charges sales tax on a home job, a remodel or a repair, and three jobs worked at 4.75%.
Not tax advice. General information from each state's revenue department, checked Oct 29, 2026. Rates shown are the state rate; city and county tax is extra where it applies. The facts of your job and contract can change the answer; for a specific job, ask a tax professional in your state.
The rule in North Carolina
Repairs taxed
Remodels are capital improvements: you pay tax on materials and charge none. Repair, maintenance and installation services are taxable to the customer.
4.75%
4.75% plus local and transit
Itemizing or time and materials
Work type decides. Installation outside a capital improvement is taxable, even when billed separately.
E-589CI
Source: NCDOR Real Property Contracts (NCDOR guidance)
“The real property contractor is the consumer of the item”
Three jobs, worked
| Job | Customer | You pay |
|---|---|---|
| Bathroom $12,000 job, $5,000 materials | $0 remodel $570 repair | $237.50 |
| Kitchen $40,000 job, $15,000 materials | $0 remodel $1,900 repair | $712.50 |
| Addition $90,000 job, $35,000 materials | $0 remodel $4,275 repair | $1,662.50 |
On the kitchen: A remodel is a capital improvement: the customer pays nothing and you pay $712.50 on materials. A repair job is taxed: $1,900 on the full $40,000.
Also check
- Keep Form E-589CI on file for a capital improvement job.
North Carolina sales tax questions
Do contractors charge sales tax in North Carolina?
On repairs and maintenance, yes. On a remodel or other capital improvement, no; the contractor pays tax on materials.
Is a remodel taxable in North Carolina?
Not as a capital improvement. Repair and maintenance work is taxable to the customer.
What does the customer sign in North Carolina?
Form E-589CI, Affidavit of Capital Improvement. The homeowner signs it and gives it to you. You keep it on file.
Compare other states
How we checked
We read each state's sales tax rule for construction contractors on the revenue department or legislature site, and its 2026 state rate. Two independent research passes covered all 50 states and DC, and a third reviewer checked the result. Where a state's own page would not load, the row names the copy we read. Last checked .
This guide explains the general rule for remodeling an owner-occupied home. It is not tax advice.