Provides that retailers are not liable for an undercollection of sales or use tax if good-faith efforts were made to comply with the law to collect the proper amount of tax on repair, maintenance, and installation services under the new changes pursuant to Section 32.18 of SL 2015-241. This exemption for liability applies between March 1, 2016, and ends December 31, 2016.

Amends GS 105-237.1(a) concerning the compromising of tax liability by the Secretary of Revenue, adding a new subdivision (7) allowing the compromise of tax liability when the taxpayer is a retailer or person under GS Chapter 105, Article 5 (Sales and Use Tax), and the tax assessment is for sales or use tax that was failed to be collected or properly calculated from repair, maintenance, and installation services but the retailer made a good faith effort to comply with the sales and use tax laws. Provides that this only applies to assessments issued from March 1, 2016, through January 1, 2023. 

Amends GS 105-164.4H(c), which provides that the amount of tax separately stated on an invoice by a real property contractor is an erroneous collection and must be remitted to the secretary, deleting language which stated that in such cases the provisions of GS 105-164.11(a)(2), concerning offsetting of tax liability by using overcollected taxes, don't apply. Effective January 1, 2015. 

Amends GS 105-164.3, definitions for GS Chapter 105, Article 5, Sales and Use Tax, adding and defining several new terms for the Article, including alteration service, house cleaning and janitorial services, installation service, landscaping service, maintenance service, motor vehicle service contract, and repair service. Makes some organizational changes and deletes the terms repair, maintenance, and installation service (term is now separated out to three new terms) and retail trade. Deletes language from the definition for retailer that defined a retailer as a person engaged in the business of delivering, erecting, installing, or applying tangible personal property that does not become part of real property, with certain exceptions (also deleted). Adds further clarifying language to the definition of sale or selling. Amends the definition for sales price, adding a new subdivision which excludes "a fee for an inspection required by law" from being included under the term "sales price." Makes additional changes to the definition for service contract, clarifying that a service contract can be for a period of time or some other defined measure (previously, only stated for a period of time). Also, adds language that the term does not include a motor vehicle service contract or a contract for a single repair transaction. Amends the term "real property contractor" to no longer exclude a person in retail trade. Effective January 1, 2017.

Amends GS 105-164.4(a), Tax imposed on retailers, adding new subdivisions that provide that the general rate of tax applies to the sales price of gross receipts from repair and maintenance services and these services are taxed in accordance with GS 105-164.4J, which provides some limited exemptions for taxes on repair and maintenance services. Also adds that the general rate of tax applies to the sales price or gross receipts of installation services, but they too are taxed according to GS 105-16.4K, which provides some limited exemptions for taxes on installation services. Provides that the general rate of tax applies to the sales price of or the gross receipts derived from alteration services. Effective January 1, 2017.

Enacts GS 105-164.4J, Repair and Maintenance services, providing that the general rate of tax applies to repair or maintenance services to tangible personal property and to repair or maintenance services to real property, unless one of the following exemptions apply to the activities: (1) painting or repainting new or existing buildings, structures, or parts, or (2) removing items like debris, construction materials, snow, asbestos, or excavation activities. Also enacts GS 105-164.4K, Installation services, providing that the general rate of tax applies to the sales price of or the gross receipts derived from the installation of tangible personal property, unless one of the following exemptions apply to the activities: (1) the installation is part of new construction, (2) the installation is part of a nontaxable real property contract and the sales price of otherwise taxable installation service does not exceed 10% of the total contract, and (3) the installation is a capital improvement as defined and specified in the bill (for example, the complete remodel of a kitchen or bathroom). Adds clarifying language in subsection (d) concerning the taxation of third-party installations. Effective January 1, 2017.

Amends GS 105-164.4H, Real property contractors, making some clarifying changes, providing that subsection (b) (retailer-contractor) applies to retailer-contractors concerning the installation of tangible personal property that becomes part of real property and that a retailer-contractor is acting as a real property contractor when performing installation service for a consumer that is exempt under GS 105-164.4K, as specified above. Clarifies that retailer-contractors acting as real property contractors can purchase tangible personal property to be installed or affixed to real property exempt from tax as specified if the retailer-contractor also purchases inventory items from the seller for resale. Further adds language that a retailer-contractor is acting as a retailer when performing installation services that are incidental to the retail sale of tangible personal property subject to tax as specified in GS 105-164.4K above. Makes organizational and conforming changes. Effective January 1, 2017.

Amends GS 105-164I, concerning tax exempt status of certain service contracts, adding a new (b)(6) providing that the tax imposed by this statute does not apply to real property, including tangible personal property that has become real property, unless repair or maintenance is taxable under GS 105-164.4J(a)(2), which then would make the service contract on it taxable. Effective January 1, 2017.

Amends GS 105-164.13, concerning tangible personal property, digital property, and services exempt from the retail sales and use tax imposed, adding language that exempts towing service. Amends the exemption for repair, maintenance,and installation services, now providing that tangible personal property, digital property, and services purchased for resale under a tax exemption certificate or a direct pay certificate are also exempt. Makes conforming changes. Effective January 1, 2017.

Amends GS 105-187.5(a), concerning alternate tax for those who rent or lease motor vehicles, requiring any charges for service contracts to be separately stated on documentation given to the renter or leasee. Requires the seller of the lease to provide the purchaser of the lease or rental with a contract documenting that the sales taxes were separate from the service contract at the time of the rental or lease. Deletes language that provided that if the amounts were not separate, than that same amount is deemed part of the gross receipts of the lease or rental. Effective January 1, 2017.