North Carolina DOR Rules Stormwater Repairs as Capital Improvement, Exempt from Sales Tax

The North Carolina Department of Revenue (DOR) issued a private letter ruling determining that certain repair and maintenance services performed by a taxpayer on stormwater infrastructure within utility easements constituted a remodeling and capital improvement to real property. The Department ruled that, as a capital improvement, the services were not subject to sales and use tax. However, the taxpayer owed sales and use tax on any tangible personal property purchased and used to fulfill the real property contract. [N.C. Dep’t of Revenue, Private Letter Ruling SUPLR-2025-0004, 08/15/25]

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