A North Carolina retailer was operating business under the assumption that the work his company did was considered manufacturing and was therefore allowed the 1% reduced sales tax rate. However, since this equipment was purchased for the rebuilding of race car engines, these purchases were subject to North Carolina use tax at the general 4.5% state rate. The purchases were ineligible for the reduced rate because the taxpayer did not manufacture new and different products for sale. Additionally, the taxpayer was liable for sales tax on the parts that were separately stated on customer invoices. (Administrative Decision No. 409, North Carolina Tax Review Board, July 2, 2003, received October 17, 2003.)