CHAPTER 07 ‑ SALES AND USE TAX

 

SUBCHAPTER 07A ‑ DIVISIONAL RULES

 

17 NCAC 07A .0101         LOCATION

17 NCAC 07A .0102         GENERAL PURPOSES

17 NCAC 07A .0103         DIVISIONAL ORGANIZATION

 

History Note:        Authority G.S. 105‑164.1 to 105‑164.44; 105‑463 to 105‑474; S.L. 1967, c. 1096; 143B‑10; 143B‑221;

Eff. February 1, 1976;

Repealed Eff. October 1, 1993.

 

 

SUBCHAPTER 7B ‑ STATE SALES AND USE TAX

 

SECTION .0100 ‑ GENERAL PROVISIONS

 

17 NCAC 07B .0101          IMPOSITION OF AND LIABILITY FOR COLLECTING AND REMITTING TAX

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 1992; October 1, 1991; October 1, 1990; May 1, 1990;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .0102          DEFINITIONS

17 NCAC 07B .0103          LICENSES REQUIRED

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.5; 105‑262;

Eff. February 1, 1976;

Amended Eff. March 15, 1980;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .0104          RETURNS

(a)  General -- G.S. 105-164.16 establishes the filing frequency of sales and use tax returns and the content of the returns. G.S. 105-164.4(c) requires a retailer and a wholesale merchant to register with the Department and obtain a certificate of registration.  G.S. 105-164.6 requires a retailer who delivers property for storage, use, or consumption but does not have a place of business in this State to register with the Department and obtain a certificate of registration.  A person who is engaged in business, is not otherwise required to file a sales and use tax return, and, on two or more occasions within a twelve-month period, purchases property subject to use tax must register with the Department and begin filing sales and use tax returns.  A person who is engaged in business, is not otherwise required to file a sales and use tax return, and purchases property subject to use tax only once in a twelve-month period must file a return and pay the tax due within 20 days after the end of the month in which the purchase was made.

(b)  Schedules.  -- A retailer who files a return that reports tax payable by more than one location in the State must attach two schedules to the return.  One schedule must list the amount of State tax due for each location in the State and the other must list the amount of local tax due for each county.

(c)  No Sales or Purchases By Business -- A retailer who does not make any sales during a reporting period must file a return for that period and enter 0.00 (zero) on the Total Due line on the return.  Similarly, a person who is not a retailer but is engaged in business, purchases tangible personal property for the business that is subject to use tax, and does not make any taxable purchases during a reporting period must file a return for that period and enter 0.00 (zero) on the Total Due line on the return.

(d)  Seasonal Business.  -- A retailer who engages in business for six or fewer consecutive months in each year may register as a seasonal filer and indicate the months in which the retailer engages in business.  A retailer who is registered as a seasonal filer is not required to file a return for an off-season reporting period in which the retailer did not engage in business.

(e)  Wholesale Merchant -- A person who engages exclusively in the business of making wholesale sales is not required to file a return.  A person who, on two or more occasions within a twelve-month period, either makes taxable sales to users, consumers, or nonregistered merchants or makes purchases subject to use tax is not engaged exclusively in the business of making wholesale sales and must begin filing sales and use tax returns.  A wholesale merchant who is not required to file a sales and use tax return and who, on only one occasion within a twelve-month period, either makes taxable sales to users, consumers, or nonregistered merchants or makes purchases subject to use tax must file a return and pay the tax due within 20 days after the end of the month in which the sale or purchase was made.

(f)  Non-Business Use Tax -- An individual who is not engaged in the business of selling tangible personal property at retail and who purchases for a non-business purpose tangible personal property that is subject to use tax must report the tax due on an annual basis.  An individual who is required to file an individual income tax return must pay the use tax with the individual income tax return for that year.  An individual who is not required to file an individual income tax return must report the tax due on Form E-554.  Form E-554 is due annually by the date set under G.S. 105-164.16.

 

History Note:        Authority G.S. 105-164.3; 105‑164.16; 105‑262; 105-269.14;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; August 1, 2002; July 1, 2000; July 1, 1999; August 1, 1998;

October 1, 1993; October 1, 1991; October 1, 1990; April 1, 1986.

 

17 NCAC 07B .0105          MEASURE OF TAX DUE

(a)  When the customer purchases more than one article at one trading period, the applicable rate of tax may be applied to each article purchased or to the total charge for all articles purchased.  Those businesses having cash registers at each counter or in each department shall collect a tax equal to the tax due on the total charge for tangible personal property purchased by a customer at one trading period without leaving the place of business.

(b)  The tax computation must be computed to the third decimal place.  The amount of tax shall be rounded up whenever the third decimal place is greater than four.

 

History Note:        Authority G.S. 105‑164.11; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; October 1, 1993; October 1, 1990.

 

17 NCAC 07B .0106          CERTIFICATES OF EXEMPTION: SALES FOR RESALE

(a)  A purchaser of tangible personal property who is properly registered with the Sales and Use Tax Division of the North Carolina Department of Revenue or in a taxing jurisdiction outside this State and is engaged in the business of selling tangible personal property at retail or wholesale and makes purchases of tangible personal property for the purpose of resale shall furnish to his vendors as their authority for not collecting the tax, either:

(1)           Streamlined Sales Tax Agreement Certificate of Exemption, Form E-595E, or

(2)           other evidence in writing adequate to support the conclusion that he is registered with the Department of Revenue or in a taxing jurisdiction outside this State for sales and use tax purposes and that the property is being purchased for the purpose of resale.

Such certificates or other written evidence shall be completed in duplicate and a copy retained by both the vendor and the vendee in their files.  In the absence of such certificates or other adequate written evidence, vendors selling taxable tangible personal property to wholesale and retail merchants shall be deemed to be making retail sales and shall be liable for collecting and paying the tax thereon at the applicable rate.

(b)  Certificates of exemption being issued for the purpose of resale shall not be used to purchase tangible personal property which is to be used or consumed by the purchaser.  The Secretary may revoke the license of any licensed merchant who makes such use of the certificate of exemption.  Vendors shall charge the applicable rate of tax on sales to registered merchants when the property sold is for use by the purchaser and not for resale.  Merchants purchasing tangible personal property for resale on a regular basis from a vendor shall only be required to furnish one certificate of exemption or other written evidence to the vendor for such purchases.  Whenever a person makes purchases of tangible personal property for resale and the property is not generally and ordinarily the type of property the purchaser will resell, the vendor shall require certificates of exemption or other written evidence in connection with individual purchases supporting that the property is being purchased for resale.

(c)  Persons who issue certificates of exemption to vendors to obtain property without payment of tax when due are subject to assessment of the penalties set out in G.S. 105‑236(5) and (5a) and may be guilty of a Class H felony.  The penalty for misuse of a certificate of exemption is applicable only to a purchaser.  The act of executing a certificate of exemption by a vendee and furnishing the document to a vendor does not constitute a use or misuse of the certificate.  The actual use or misuse occurs when a purchase is made and the vendor, relying on the certificate furnished by the vendee, does not charge sales or use tax thereon on the basis that the sale is a "wholesale sale" as defined in G.S. 105‑164.3(24).  A single purchase is considered to be the tangible personal property purchased at one time as reflected on the bill of sale.  The penalty shall be applied only once to each invoice or bill of sale for which a misuse of the certificate has occurred.  This penalty is subject to the discretionary authority of the Secretary of Revenue pursuant to G.S. 105‑237.

(d)  The Secretary may extend to a registered merchant written permission to make purchases for his own use pursuant to the certificate of exemption and assume liability for payment of the applicable tax to the Department when the character of the business of the purchaser is such that it would impose undue hardship upon the vendor and vendee to determine the transactions upon which the vendor would ordinarily be required to impose the tax.  The purchaser shall furnish written evidence of such assumption of liability to the purchaser's vendors; the vendors must retain the documentation in their files.

(e)  This rule applies to sales to resident and nonresident retail or wholesale merchants.  Reference is made to 17 NCAC 7B .2301 for the treatment of sales to nonresident retail or wholesale merchants.

 

History Note:        Authority G.S. 105‑164.28; 105‑236; 105‑262;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; February 1, 1988; May 11, 1979.

 

17 NCAC 07B .0107          RECORDS REQUIRED TO BE KEPT

 

History Note:        Authority G.S. 105‑164.22; 105‑164.23; 105‑164.25; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .0108          TRADE DISCOUNTS AND CASH DISCOUNTS

(a)  Trade.  -- Trade discounts and bargaining discounts are not a part of the sales price on which sales tax is computed when the sales price is reduced by the discounts before the computation of tax.  A trade discount is a price reduction afforded a particular customer or customers in a particular trade or group without reservation at the time the sale is being negotiated.  A bargaining discount is a price reduction extended to a customer at the time the sale is being negotiated as a result of bargaining between the customer and the seller.

(b)  Cash.  -- A cash discount is a reduction in the sales price, and the tax must be computed and paid on the sales price after allowance for the cash discount.  Generally, a cash discount is a deduction from the sales price allowed for prompt payment of the bill.  Likewise, cash discounts are not a part of the purchase price on which tax is due.  A person who purchases tangible personal property for use or consumption in this State is liable for remitting the tax due on the purchase price after allowance for the cash discount.

(c)  Over-allowance.  -- The amount of an over‑allowance to a purchaser for an item taken in trade as a credit or part payment on the sale of a new article is not a reduction in the sales price of the new article.  The tax must be computed and paid on the full gross sales price of the new article without any deduction on account of the trade‑in credit or allowance.

 

History Note:        Authority G.S. 105‑164.3; 105‑262;

Eff. February 1, 1976.

Amended Eff. August 1, 2002.

 

17 NCAC 07B .0109          APPLICATION OF TAX TO FISH BAIT

Sales of bloodworms or crickets to users other than commercial fishermen for bait are subject to the applicable statutory state and any applicable local sales or use tax except when such products are sold in their original or unmanufactured state by the producer in his capacity as the producer.  Sales of shrimp or seafood to users other than commercial fishermen for bait are subject to only the two percent local sales or use tax except when sold in their original or unmanufactured state by the producer in his capacity as the producer.

 

History Note:        Authority G.S. 105‑164.4; 105-164.13B; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .0110          CHARTER BOAT OPERATORS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 3, 1984.

 

17 NCAC 07B .0111          STAMPS, COINS, ETC.

Persons engaged in the business of selling collectible stamps, coins and related items to collectors must register with the Department of Revenue for the purpose of collecting and remitting the applicable statutory state and local sales or use tax on such sales.  Sales of stamps through vending machines or in any other manner for use as United States postal fees are exempt from the tax.  Casual or isolated sales of coins and stamps by individuals who are not engaged in the business are exempt from tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; March 1, 1984.

 

17 NCAC 07B .0112          SALES OF HOUSEHOLD GOODS

Occasional sales of household goods on which the sales tax has been paid are exempt from the tax when sold by the owner in his capacity as owner and not in the capacity of a retail merchant.  Such sales are deemed to be casual or isolated sales by persons not holding themselves out as engaged in business.

 

History Note:        Authority G.S. 105‑164.3; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .0113          AUCTIONEERS AND AUCTION SALES

(a)  Auctioneers who buy or acquire tangible personal property by consignment or otherwise which they sell at retail on their own account shall collect and remit the tax due on such sales and must have a Certificate of Registration. This includes persons who operate auction barns or similar places of business where they regularly receive merchandise on a consignment or some other basis and sell such items at auction.

(b)  Auctioneers are not liable for collecting and remitting sales tax when they sell tangible personal property for the owners strictly in the capacity of an auctioneer and charge or receive a percentage of the sales price or other fee as compensation for their services.  In these type transactions, the auctioneer is acting as agent for the owner of the property. Examples of auction sales on which no sales tax is due are estate sales of household possessions and sales of farm machinery and equipment for a farmer going out of business when such sales are conducted at the property owner's home or farm.

(c)  If a retail or wholesale business conducts an auction sale as, for example, when it is going out of business, it shall collect and remit sales tax on any retail sales of the inventory of goods which it held for resale.  The tax base is the sales price of the item before deducting the compensation paid to the auctioneer.  Sales of store fixtures and equipment held for use in operating the business are exempt from sales tax as occasional or isolated sales by someone not engaged in the business of selling that kind of property.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993.

 

17 NCAC 07B .0114          BLIND MERCHANTS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .0115          RESEARCH SERVICES

Sales of scientific or research equipment to independent contract research organizations for use in performing research services for clients are subject to the applicable statutory state and local sales or use tax.  If a contract research organization qualifies under G.S. 105-187.51B(a)(2), then research equipment that meets the requirements of that subsection are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105-164.13; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .0116          COMPUTER SOFTWARE

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; May 1, 1985; December 1, 1982; January 1, 1982;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .0117          PROPERTY TRANSFERS BETWEEN DIVISIONS

Firms having divisions, both within and without North Carolina, are liable for remitting the applicable rate of tax on any purchases of tangible personal property for use in North Carolina, including any property purchased outside North Carolina and imported into North Carolina for use in this state.  No tax will be due with respect to those transfers of property by an out‑of‑state firm to its North Carolina divisions for their use when the property was originally purchased for use outside this state by the out‑of‑state firm and was in fact used by that firm outside this state for a substantial period of time.

 

History Note:        Authority G.S. 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. December 1, 1997; October 1, 1993.

 

17 NCAC 07B .0118          CHANGE IN OWNERSHIP

When a partnership dissolves and one or more of the former partners starts a new business on an individual basis, each new business must complete an application for registration.  When a partnership or proprietorship is succeeded by a new business entity, the new entity must complete an application for registration.

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; April 1, 1997.

 

17 NCAC 07B .0119          INTEREST ON ASSESSMENTS

 

History Note:        Authority G.S. 105‑164.16; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 1, 1982;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .0120          TRANSFEREE LIABILITY

The Secretary of Revenue may not assert a transferee liability against the purchaser of a business for sales and use taxes incurred by anyone further removed along the chain of registration than the purchaser's immediate predecessor, unless the Department can trace its lien against specific property down through the ensuing chain of title.

 

History Note:        Authority G.S. 105‑164.38; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 1, 1982.

 

17 NCAC 07B .0121          BANKRUPT'S LIABILITY

(a)  A discharge under 11 U.S.C. section 727, 1141, 1228(a), 1228(b), or 1328(b) does not relieve an individual debtor in bankruptcy from liability for payment of pre‑petition sales taxes.  Furthermore, it does not relieve and individual debtor from liability for payment of pre‑petition use taxes:

(1)           on pre‑petition transactions for which a return is last due, including any extension, after three years before the petition date;

(2)           on transactions with respect to which a return:

(A)          was not filed; or

(B)          was filed after the due date, including any extension, and after two years before the petition date; or

(3)           with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.

(b)  Associated penalties and post‑petition interest also are not discharged on such sales and use taxes imposed with respect to transactions occurring within three years prior to the petition date.

(c)  An individual debtor's discharge under 11 U.S.C. section 1328(a) or a corporate debtor's discharge under 11 U.S.C. section 1141 releases the debtor from liability for payment of pre‑petition sales and use taxes, penalties and interest.  The tax liability is replaced by the debtor's liability under the repayment plan.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264; 11 U.S.C. 532;

Eff. February 1, 1976;

Amended Eff. October 1, 1993.

 

17 NCAC 07B .0122          COUPONS

(a)  Sales of coupons and coupon booklets to advertising agencies, promoters and other users or consumers for use in advertising programs aimed at the promotion of sales by retail merchants are subject to sales or use tax.  When coupons issued pursuant to such programs are subsequently taken by retail merchants from their customers in connection with sales of their products, the retail merchant shall charge and remit sales tax on the net amount charged for the products after deduction of any credit by reason of the coupons.  Such coupons are considered to be for the purpose of advertising discounts or special sales prices, such as the sale of two items for the price of one item, and are not considered to be a part of the sales price upon which the sales tax is due.

(b)  When retailers issue coupons relating to products they sell and later receive the coupons from customers in connection with sales of their products, the retailer shall charge and remit sales tax on the net amount charged for the products after deduction of any credit by reason of the coupons.  Coupons issued by retailers are considered to be for the purpose of advertising discounts or reductions in the suggested sales price of products and are not considered to be a part of the sales price upon which sales tax is due.

(c)  When manufacturers issue coupons relating to their products and the coupons are subsequently taken by retailers from their customers in connection with sales of the manufacturers' products, the retailer shall charge and remit sales tax on the total sales price of the products before deduction of any credit or issuance of any refund by reason of any coupons.  Manufacturers' coupons taken by retailers from their customers constitute payment, or part payment, of the sales price of the property upon which sales tax is due.  Any amounts paid by the manufacturer to the retailer for the value of the coupons or for handling them are not subject to sales tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264;

Eff. September 14, 1977;

Amended Eff. October 1, 1993; June 1, 1984.

 

17 NCAC 07B .0123          COMMERCIAL FISHERMEN – CERTIFICATE OF EXEMPTION

(a)  Certificate. - A commercial fisherman may complete a Streamlined Sales Tax Agreement Certificate of Exemption, form E-595E.  The certificate authorizes a retailer or a wholesale merchant to whom it is presented to sell property that is exempt from sales and use tax under G.S. 105-164.13(9) to the commercial fisherman without collecting sales and use tax.  A retailer or a wholesale merchant who does not collect tax on an item sold to a commercial fisherman and does not have a certificate to support the tax-free sale must have other written evidence that supports the tax-free sale.

(b)  Items Covered by Certificate. - The items listed in G.S. 105-164.13(9) can be purchased under a certificate of exemption if the items are to be used principally in commercial fishing operations.  Commercial fishing operations include charter boat and head boat operations that charge people to take them fishing. Items that may be exempt under G.S. 105-164.13(9) and, therefore, purchased under a certificate include paint brushes, paint rollers, acetylene, oxygen, funnels, sanding discs, welding rods, saw blades, drill bits, foul weather gear, gloves, and life vests. These items are exempt if they are for use principally in commercial fishing operations.

(c)  Items Not Covered By Certificate. - Only items that are described in G.S. 105-164.13(9) and are for use principally in commercial fishing operations are exempt from tax and therefore eligible to be purchased under a certificate.  Items for personal use by a commercial fisherman are not exempt under G.S. 105-164.13(9) and, therefore, may not be purchased under a certificate.  Personal items include tableware, toothpaste, soap, food, and clothing. Items for use in catching marine mammals, fish, shellfish, and crustaceans for recreation or personal use or consumption are not exempt and may not be purchased under a certificate.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. July 5, 1980;

Amended Eff. April 1, 2006; July 1, 2000; August 1, 1998; November 1, 1995; April 1, 1995; October 1, 1993; July 1, 1989.

 

17 NCAC 07B .0124          ERRONEOUS INFORMATION

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. January 1, 1982;

Amended Eff. October 1, 1993; October 1, 1990;

Repealed Eff. July 1, 2000.

 

17 NCAC 07B .0125          FLEA MARKETS

 

History Note:        Authority G.S. 105‑164.3(1); 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1986;

Amended Eff. October 1, 1993; June 1, 1992;

Repealed Eff. July 1, 2000.

 

17 NCAC 07B .0126          HOLY BIBLES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. October 1, 1991;

Repealed Eff. October 1, 1993.

 

SECTION .0200 ‑ GENERAL APPLICATION OF LAW TO MANUFACTURING AND INDUSTRIAL PROCESSING

 

17 NCAC 07B .0201          TAX ON MANUFACTURING AND PROCESSING MACHINERY

17 NCAC 07B .0202          CLASSIFICATION OF MANUFACTURING ACTIVITIES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; June 1, 1992; October 1, 1991; May 11, 1979; September 30, 1977;

Repealed Eff. July 1, 2006.

 

17 NCAC 07B .0203          EXEMPT SALES TO MANUFACTURERS

17 NCAC 07B .0204          FUEL

17 NCAC 07B .0205          BUILDINGS AND STRUCTURES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105.262;

Eff. February 1, 1976;

Amended Eff. May 11, 1979;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .0206          SALES BY MANUFACTURERS

17 NCAC 07B .0207          PURCHASES BY MANUFACTURERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑164.28; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; July 1, 1999; August 1, 1998; October 1, 1993; March 1, 1993; August 1, 1988; November 1, 1982;

Repealed Eff. July 1, 2006.

 

SECTION .0300 ‑ SPECIFIC TANGIBLE PERSONALTY CLASSIFIED FOR USE BY INDUSTRIAL USERS

 

17 NCAC 07B .0301          MILL MACHINERY

17 NCAC 07B .0302          ITEMS NOT MILL MACHINERY

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; June 1, 1992; October 1, 1991; January 3, 1984;

Repealed Eff. July 1, 2006.

 

SECTION .0400 ‑ SPECIFIC INDUSTRIES

 

17 NCAC 07B .0401          SPECIFIC INDUSTRIES: CLASSIFICATIONS

17 NCAC 07B .0402          FURNITURE FACTORIES

17 NCAC 07B .0403          BOTTLING PLANTS

17 NCAC 07B .0404          ELECTRIC POWER COMPANIES

17 NCAC 07B .0405          MINING AND QUARRYING

17 NCAC 07B .0406          OTHER MILLS AND PROCESSORS

17 NCAC 07B .0407          DAIRIES AND CREAMERIES

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.6; 105‑164.13; 105-164.21A; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. August 1, 1998; October 1, 1993; October 1, 1991; August 1, 1988; June 1, 1985; June 1, 1984; May 11, 1979; September 30, 1977;

Repealed Eff. July 1, 2006.

 

SECTION .0500 ‑ EXEMPT SALES TO MANUFACTURERS

 

 

17 NCAC 07B .0501          IN GENERAL

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .0502          PACKAGING MATERIALS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991;

Repealed Eff. July 1, 2006.

 

17 NCAC 07B .0503          INGREDIENTS

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. November 1, 1982.

 

SECTION .0600 ‑ SALES OF MILL MACHINERY AND ACCESSORIES

 

17 NCAC 07B .0601          IN GENERAL

17 NCAC 07B .0602          PACKAGING MACHINERY

17 NCAC 07B .0603          TAPE DISPENSING MACHINES

17 NCAC 07B .0604          STRAPPING MACHINE

17 NCAC 07B .0605          MIXING TANKS

17 NCAC 07B .0606          POLLUTION ABATEMENT EQUIPMENT

17 NCAC 07B .0607          GAS STACKS

17 NCAC 07B .0608          PRINTING PLATES

17 NCAC 07B .0609          POLLUTION ABATEMENT CHEMICALS

17 NCAC 07B .0610          WATER PURIFICATION EQUIPMENT AND CHEMICALS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; April 1, 1986; July 5, 1980; May 11, 1979; September 30, 1977;

Repealed Eff. July 1, 2006.

 

17 NCAC 07B .0611          MOLDS AND FORMS

17 NCAC 07B .0612          RAGS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. November 1, 1982.

 

17 NCAC 07B .0613          CHEMICALS FOR BOILERS

17 NCAC 07B .0614          IDENTIFICATION AND INSTRUCTION TICKETS

17 NCAC 07B .0615          INSULATION MATERIALS: MANUFACTURERS

17 NCAC 07B .0616          SANDBLAST SAND

17 NCAC 07B .0617          LIFT TRUCKS

17 NCAC 07B .0618          SINGLE ARTICLE APPLICATION: SYSTEM

17 NCAC 07B .0619          WELDING RODS

17 NCAC 07B .0620          COMBUSTIBLE SOOT REMOVERS

17 NCAC 07B .0621          ELECTRIC LIGHT BULBS

17 NCAC 07B .0622          PRINTING PRESSES

17 NCAC 07B .0623          CALCIUM CHLORIDE AND SALT

17 NCAC 07B .0624          ELEVATORS

17 NCAC 07B .0625          INSULATION MATERIALS: CONTRACTORS

17 NCAC 07B .0626          PAPER STOCK

17 NCAC 07B .0627          HANG TAGS AND LABELS

17 NCAC 07B .0628          STOCK CONTROL CARDS

17 NCAC 07B .0629          OFFICE SUPPLIES: STENCILS

17 NCAC 07B .0630          SCALES

17 NCAC 07B .0631          SEWAGE TREATMENT PLANTS

17 NCAC 07B .0632          GRAIN ELEVATORS

17 NCAC 07B .0633          ANIMALS AND ANIMAL CAGES

17 NCAC 07B .0634          ELECTRIC POWER DRIVE

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; 105‑-264;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; July 1, 1984; July 5, 1980; May 11, 1979; September 30, 1977; September 14, 1977;

Repealed Eff. July 1, 2006.

 

SECTION .0700 ‑ SPECIFIC INDUSTRY PURCHASES

 

17 NCAC 07B .0701          IN GENERAL

17 NCAC 07B .0702          FURNITURE FACTORIES

17 NCAC 07B .0703          BOTTLING PLANTS

17 NCAC 07B .0704          MINING AND QUARRYING

17 NCAC 07B .0705          TEXTILE MILLS

17 NCAC 07B .0706          SAWMILLS

17 NCAC 07B .0707          CONCRETE MANUFACTURERS

17 NCAC 07B .0708          ICE MANUFACTURERS

17 NCAC 07B .0709          PURIFICATION PLANTS

17 NCAC 07B .0710          FOOD PROCESSORS

17 NCAC 07B .0711          MODULAR HOME MANUFACTURERS

17 NCAC 07B .0712          MONUMENT MANUFACTURERS

17 NCAC 07B .0713          ELECTROPLATING INDUSTRIES

17 NCAC 07B .0714          REFRACTORY MANUFACTURERS

17 NCAC 07B .0715          HATCHERIES

17 NCAC 07B .0716          STATE AGENCIES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. April 1, 1995; October 1, 1993; June 1, 1992; October 1, 1991; October 1, 1990; March 1, 1984; January 1, 1982; July 5, 1980; May 11, 1979; September 30, 1977;

Repealed Eff. July 1, 2006.

 

17 NCAC 07B .0801          ADJUSTMENTS AND REPLACEMENTS

(a)  Whenever any taxable article is returned to the manufacturer for adjustment, replacement, or exchange under a guaranty as to its quality or service and pursuant thereto a new article is given free, or at a reduced price, the sales or use tax shall be computed on the actual amount, if any, paid to the manufacturer for the new article.

(b)  Dealers using tangible personal property to fulfill sales warranties or guaranty obligations to a customer without cost to the customer are not liable for the applicable statutory state and local sales or use tax on the dealer's cost price of all tangible personal property so used. 

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .0802          MADE TO ORDER AND INSTALLATION SALES: Generally

17 NCAC 07B .0803          cabinetmakers

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; October 1, 1988;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .0804          FABRICATED ARTICLES

When a vendor of materials contracts to furnish fabricated articles to its customers and subcontracts such fabrication, the entire charge is taxable notwithstanding that the fabrication labor may be separately charged to and collected from the vendor's customer and in turn remitted to the vendor's subcontractor.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .0805          SIGN FABRICATING AND PAINTING

17 NCAC 07B .0806          repairs and alterations: generally

17 NCAC 07B .0807          clothing alterations

17 NCAC 07B .0808          reupholstering

17 NCAC 07B .0809          laminating services

17 NCAC 07B .0810          bullets and shells-reloading

17 NCAC 07B .0811          fire extinguishers: recharging

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; 

Repealed Eff. March 1, 2016.

 

section .0900 – advertising and advertising agencies: public relations firms

 

17 NCAC 07B .0901          ADVERTISING AND ADVERTISING AGENCIES

(a)  Professional Services. -- Advertising agencies are engaged in the business of rendering professional services when they produce advertising, such as radio and television spots or newspaper, magazine, or billboard advertising, and contract in their own behalf with radio and television stations, newspaper or magazine publishers, outdoor advertising companies, or other media for time or space to televise, broadcast, publish, or otherwise display their advertising.  Receipts derived by advertising agencies from furnishing these professional services are not subject to sales or use tax.  However, their purchases of taxable tangible personal property for use in producing the advertising are subject to the applicable statutory state and local sales or use tax.

Agencies rendering professional services rely on expertise in advertising strategy, media buying, and in graphic arts production in their specialized fields to secure and retain clients.  Usually agreements to provide professional advertising services also have the following characteristics:

(1)           The agency selects or advises the client on the different kinds of advertising to be used.

(2)           The agency is primarily responsible for developing the concept or design of the advertising.

(3)           The agency produces or arranges for the production of the advertising.

(4)           The agency places or arranges for the placement of the advertising on radio or television stations or in newspapers, magazines, or other media and the agency has purchased time or space in the media to display the advertising instead of delivering it to the client for placement or distribution.

Advertising agencies are also engaged in the business of rendering services when they contract to do market research, consulting, statistical analysis, or other services that result only in a report of their findings to the client.

The tax is due on all tangible personal property purchased by these agencies for use in the performance of the services in this Paragraph regardless of whether the property is acquired in the name or account of the advertising agencies or their clients.  Advertising agencies that, in performing these services, purchase paper, ink, printing plates, positives, negatives, color separations, photographs, filmed or recorded commercials that are not exempt audiovisual masters, and any other tangible personal property from suppliers in North Carolina or from out‑of‑state suppliers who charge the applicable tax must pay the tax due directly to their suppliers.  Advertising agencies that purchase tangible personal property, from out‑of‑state suppliers who do not charge and remit the applicable tax must remit the use tax due directly to the Department on the purchase price of the property without any deduction on account of the cost of the materials used, labor or service costs, transportation charges, or any expenses whatsoever.

(b)  Retail Sales. -- Advertising agencies are considered to be retailers when they produce, cause to be produced, fabricate, purchase, or otherwise acquire catalogs, magazines, handbills, brochures, programs, pamphlets, or similar printed matter or any other tangible personal property they sell and deliver to their clients or to others on behalf of their clients for delivery or distribution as advertising material or for any use or purpose other than for resale.  Advertising agencies making retail sales of tangible personal property, other than exempt audiovisual masters, must collect and remit the applicable statutory state and local sales or use tax on the sales price of the property whether it is prepared by the agency or acquired from outside sources.  The sales price to which the tax applies is the total amount for which the tangible personal property is sold including all charges for services rendered in the production, fabrication, manufacture, or delivery of the property, such as charges for commissions, supervision, research, transportation charges, postage, telephone and telegraph messages, copy, models' fees, stage props, printing, printing plates, film, positives, negatives, transparencies and color separations, even though the agency may separately state the charges on the invoice rendered to the client and in the agency's records.

(c)  Retainer and Consultation Fees. -- Charges by advertising agencies to their clients for retainer fees that are directly related to the purchase, acquisition, fabrication, or production and sale of tangible personal property are subject to sales or use tax.  Charges by advertising agencies for retainer fees to their clients are generally paid in advance to cover future services and if no sale of tangible personal property is involved are not subject to sales or use tax.  Consultation fees charged to clients in connection with oral or written reports only and not in connection with the sale of tangible personal property are also exempt from sales or use tax.  Consultation fees directly involved in transactions that require the purchase, acquisition, fabrication or production and sale of tangible personal property, such as pamphlets and brochures, are a part of the sales price and are subject to sales and use tax even though the fees may be separately stated on the customer's invoice.  If an advertising agency is retained to perform market research, analyze statistics, and develop an advertising concept on which a report is presented, either orally or in writing to the client, the charges for these services are not taxable.  After considering the report, if the client decides to pursue the advertising concept and contracts with the same agency to develop and produce advertising material to be placed on radio or television spots or in space in newspapers, magazines, or on billboards, the agency must remit sales or use tax on its purchase of all taxable tangible personal property used in producing the advertising material.  If the advertising concept calls for the production, fabrication, purchase, or acquisition of catalogs, magazines, handbills, brochures, programs, pamphlets, or similar printed matter or any other tangible personal property they sell and deliver to their clients or to others for their clients, the advertising agency is making retail sales subject to sales and use tax on the sales price of the property.  The sales price to which the tax applies includes all the items and services described in Paragraph (b) of this Rule.

(d)  Purchases for Resale. -- Purchases by advertising agencies of paper, ink, and other tangible personal property that become a part of tangible personal property sold by advertising agencies at retail or wholesale, including purchases for resale in the same form, are exempt from sales or use taxes when the purchases are supported by properly completed Streamlined Sales Tax Agreement Certificates of Exemption, form E-595E, or other evidence in writing adequate to support the conclusion that the property is being purchased by a registered merchant for the purpose of resale.  The term "part of tangible personal property" includes only those items that are incorporated into and become a part of property sold and does not include those items that are merely used or incidentally consumed in its production.  For example, a photograph, transparency, printing plate, positive, negative, or color separation does not become an ingredient or component part of property sold even though the image thereon is reproduced as a part of the property sold.

(e)  Purchasing for Use. -- Purchases by advertising agencies of film, printing plates, photographs, positives, negatives, transparencies, color separations, and similar tangible personal property for use in the production of advertising material are subject to the applicable statutory state and any local sales or use tax because the property does not become incorporated into or become a component part of the property produced for sale.  When advertising agencies purchase items for use in the production of property for sale, they are the users or consumers of the property and must pay the state and local sales or use tax on the cost price without regard to the disposition that may be made of the items by the advertising agency.

(f)  Acting as Agent .-- An agent is one who represents another, called the principal, with third parties.  For sales and use tax purposes, to establish that a particular acquisition is made by an agency as agent for its client and not on the agency's own behalf, all of the following must apply:

(1)           The agency must disclose to the supplier the name of the principal for whom the agency is acting as agent and establish that it has the authority to bind the principal with respect to the purchase.

(2)           The agency must be able to document that its status as agent existed prior to the acquisition.

(3)           The price billed by the agency to the principal for the personal property, exclusive of any agency fee, must be the same as the amount paid to the supplier.

(4)           The agency may make no use of the property for its own account.

An advertising agency must remit the tax due on its purchases to suppliers within this state and suppliers outside this state who collect and remit the applicable tax.  An advertising agency that purchases tangible personal property on behalf of a principal from out‑of‑state suppliers who do not charge and remit the applicable tax must remit the use tax due, as agent for its principal, directly to the Department on the purchase price of the tangible personal property without any deduction on account of the cost of the materials used, labor or service costs, transportation charges, or any expenses whatsoever. All acquisitions by advertising agencies of tangible personal property such as catalogs, brochures, pamphlets, and the like are regarded as purchases by agencies on their own behalf for resale or for use unless the agency establishes with respect to any acquisition that it is acting as agent for its principal pursuant to a prior express contract.  An advertising agency purchasing tangible personal property as an agent on behalf of its client for the client's use may not issue its certificate of exemption to the supplier.  An advertising agency that issues its certificate of exemption to its supplier is presumed to be purchasing tangible personal property in its own behalf for resale rather than acting as agent for its principal.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13(22a); 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; August 1, 1998; October 1, 1993; October 1, 1991;

December 1, 1984; May 11, 1979.

 

17 NCAC 07B .0902          ADVERTISING ARTISTS

Advertising artists who actually produce paintings, portraits, negatives, photographs, or other tangible artistic creations and sell them to users or consumers are liable for collecting and remitting the applicable statutory state and local sales or use tax on the sales price of such articles.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .0903          HANG TAGS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .0904          PUBLIC RELATIONS FIRMS

(a)  Public Relations Firm Rendering Professional Services: If a public relations firm is retained to plan and conduct a public relations program which requires it to conduct research, opinion polls and surveys, compile data, analyze all of the foregoing and present a written or oral report of its findings to its client, the charges for these services are not subject to sales or use tax.  The public relations firm shall pay the applicable statutory state and local sales or use tax on the cost price of any tangible personal property purchased for use in performing the aforementioned services.  If the client decides to pursue the plan or concept developed by the public relations firm and such action results in the development or acquisition of tangible personal property by the public relations firm for its use in carrying out the goals or objectives of the plan or concept, it is liable for paying the applicable statutory state and local sales or use tax on such purchases.

(b)  Public Relations Agency Making Retail Sales: If the plan or concept calls for the production, fabrication, purchase or acquisition of tangible personal property by the public relations firm which it sells and delivers to its client or sells to its client and delivers to others on behalf of its client, the public relations firm is making retail sales which are subject to sales or use tax on the sales price of such property.  Tax shall apply to the sales price of the property and shall include fees directly involved in the production of the property and those charges specifically associated with the fabrication, manufacture or delivery of the property, such as charges for commissions, supervision, research, transportation charges, postage, telephone and telegraph messages, copy, models' fees, stage props, printing, printing plates, film, positives, negatives, transparencies and color separations even though the firm may separately state such charges on the invoice rendered to the client and in the firm's records.

Note:  For Retainer and Consultation Fees: See 17 NCAC 7B .0901(c).

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. October 1, 1993;

Amended Eff. April 1, 2006.

 

SECTION .1000 ‑ BARBERS: BEAUTY SHOP OPERATORS: SHOE REPAIRMEN: WATCH REPAIRMEN

 

17 NCAC 07B .1001          BARBER AND BEAUTICIAN SUPPLIES

(a)  Sales to barber and beauty shop operators of tools, furniture, fixtures, equipment, materials, health and beauty aids and any and all other supplies purchased for use in connection with the operation of their business are subject to the applicable statutory state and local sales or use tax.  Barber and beauty shop supply houses and other businesses making sales of the above items to barber and beauty shop operators to be used or consumed in rendering personal services to their customers are liable for collecting and remitting the applicable statutory state and local sales or use tax to this Department on such sales.

(b)  Barber and beauty shop operators who purchase hair tonics, cosmetics and other health and beauty aids for resale and who maintain an inventory and facilities for regularly and continuously making retail sales of such items to their customers shall register with this Department as retail merchants and are liable for collecting and remitting the applicable statutory state and local sales or use tax on such sales.  Barber and beauty shop operators purchasing hair tonics, cosmetics and other health and beauty aids, some of which are regularly and continuously sold to their customers and some of which are used or consumed in rendering personal services to their customers, may purchase such items without payment of tax to barber and beauty shop supply houses and other suppliers by furnishing the suppliers with properly executed Streamlined Sales Tax Agreement Certificates of Exemption, Form E-595E.  By executing the certificates, the barber and beauty shop operators assume responsibility for payment of tax directly to this department on the sales price of items sold to their customers and on the cost price of items used or consumed in rendering personal services to their customers.  The above provisions do not apply to barber and beauty shop operators who make occasional or infrequent sales of hair tonics and other health and beauty aids from their stock of merchandise which was purchased to be used in rendering services to their customers.  Receipts of barber and beauty shop operators derived from rendering personal services are not taxable.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1002          Shoe repairmen

17 NCAC 07B .1003          Watch: Clock and jewelry repairmen

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; February 1, 1988;

Repealed Eff. March 1, 2016.

 

SECTION .1100 ‑ SALES OF TOBACCO items: FARM MACHINES AND MACHINERY

 

17 NCAC 07B .1101          FARM MACHINES: MACHINERY: TOBACCO ITEMS

(a)  Sales to farmers of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery for use by them in planting, cultivating, harvesting or curing of farm crops including nursery or greenhouse stock and products of the forest, or to dairy operators, poultry farmers, egg producers, and commercial producers of animals are exempt from sales and use tax.  Sales of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery to farmers for any purpose or use not defined in this Rule, or to any person other than a farmer as herein defined, even though for a use or purpose herein defined, are subject to the applicable statutory state and local sales or use tax without limitation.  In other words, to qualify for the exemption from sales and use tax, the transaction must be a sale of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery to a farmer for one of the uses or purposes herein defined and unless all three conditions are met, the sale is subject to the applicable statutory state and local sales or use tax without limit.

(b)  Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption, may be completed by a farmer or producer and accepted by a vendor as the authority for exempting from the sales and use tax the following:

(1)           farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery for use in planting, cultivating, harvesting or curing farm crops, including nursery or greenhouse stock and products of the forest, or for use in the production of dairy products, poultry, eggs, livestock, fish or aquatic plants.

(2)           The lease or rental of tobacco sheets used in handling tobacco in the warehouse and transporting tobacco to and from the warehouse.

(3)           A metal flue sold for use in curing tobacco, whether the flue is attached to a handfired furnace or used in connection with a mechanical burner.

(4)           A bulk tobacco barn or rack, parts and accessories attached to the tobacco barn or rack, and any similar apparatus, part, or accessory used to cure or dry tobacco or another crop.

(5)           A grain, feed, or soybean facility, and parts and accessories attached to the facility.

(6)           Containers for use in the planting, producing, harvesting, curing, marketing, packaging, sale, or transporting or delivery of products when such containers do not go with and become a part of the sale of products.

(7)           Wrapping paper, labels, wrapping twine, paper, cloth, plastic bags, cartons, packages and containers, wooden boxes, baskets, coops, barrels, and like articles sold to farmers and producers when such materials are used for packaging, shipment or delivery of tangible personal property which is sold either at wholesale or retail and when such articles constitute a part of the sale of such tangible personal property and are delivered with it to the customer.

(c)  When a customer makes a purchase and executes a Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption which is then furnished to the vendor, the vendor is relieved of the liability for any additional tax that is subsequently determined to be due and the purchaser has assumed liability for the tax if the vendor has a fully completed Form E-595E on file.  In the absence of the certificate or other documentation to support an exemption from tax, the vendor is liable for any additional tax determined to be due on a transaction.

(d)  The following are examples of sales of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery which are exempt when sold to farmers for use by them in planting, cultivating, harvesting or curing farm crops:

(1)           tractors,

(2)           plows,

(3)           harrows,

(4)           cultivators,

(5)           mowers,

(6)           planters,

(7)           corn pickers and snappers,

(8)           manure spreaders,

(9)           manure loaders,

(10)         harvester threshers,

(11)         rotary tillers,

(12)         fertilizer distributors,

(13)         wind‑rowers,

(14)         forage blowers,

(15)         stalk cutters,

(16)         seeders,

(17)         grain loaders,

(18)         harvesters,

(19)         cotton pickers,

(20)         rotary hoes,

(21)         corn and hay elevators,

(22)         tobacco curers,

(23)         tobacco flues,

(24)         tobacco trucks or slides,

(25)         wagons,

(26)         non‑highway trailers,

(27)         mechanical rakes,

(28)         balers,

(29)         rod weeders,

(30)         combines,

(31)         tobacco transplanters,

(32)         shredders for corn stalks,

(33)         power loader lifts,

(34)         platform carriers,

(35)         portable insecticide sprayers,

(36)         chain saws,

(37)         motor oils, greases, lubricants and anti‑freeze;

(38)         hydraulic fluids.

(e)  Examples of items which are subject to the applicable statutory state and local sales or use tax when sold to farmers for general purposes:

(1)           lawn mowers;

(2)           snow plows;

(3)           oil storage tanks and fittings;

(4)           drainage tile;

(5)           paint, cleaning compounds and brushes;

(6)           baler twine;

(7)           tobacco sticks and tobacco twine;

(8)           tools for maintaining machinery and equipment.

(f)  The lists in Paragraphs (d) and (e) of this Rule are not intended to be exclusive, but are for illustrative purposes only. If there is any question as to the tax status of any item which does not appear therein, such question shall be submitted to the secretary, together with a detailed statement of the business of the purchaser, the design and structure of the article, and its use, to the end that the applicable rate of tax may be correctly determined.

(g)  The word farmer as used in this Rule includes crop farmers, dairy operators, poultry farmers, egg producers, livestock farmers, nurserymen, greenhouse operators, farmers who raise fish or water plants, orchardmen and other persons coming within the generally accepted definition of the word.  It does not include a person who merely cultivates a garden for personal use.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; August 1, 1996; April 1, 1995; July 1, 1994; October 1, 1993; June 1, 1992.

 

17 NCAC 07B .1102          EXPERIMENTAL FARMS

North Carolina State University and the Department of Agriculture operate experimental farms which sell the farm products they produce and therefore are classified as farmers within the generally accepted meaning of the word.  The farms at Women's Prison, Caledonia Prison and its field unit also come within the classification of farmers.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .1103          TRACTORS: BACKHOES: DRAGLINES

Sales of tractors, backhoes or draglines to farmers for use in the construction and maintenance of drainage facilities to promote the growth of farm crops are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006.

 

17 NCAC 07B .1104          IRRIGATION EQUIPMENT

Irrigation equipment, including irrigation pumps, irrigation pipe, sprays, and nozzles, is farm machinery when sold to farmers; these items are exempt from sales and use tax. 

 

History Note:        Authority G.S. 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006.

 

17 NCAC 07B .1105          ANIMAL CLIPPERS

Sales of animal clippers and parts therefor to farmers for use in the commercial production of animals are exempt from tax when such clippers are placed or installed in or affixed to any commercially manufactured facility, enclosure or structure used for commercial purposes in housing, raising or feeding animals.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; October 1, 1993; August 1, 1988; July 5, 1980.

 

17 NCAC 07B .1106          LAYING CAGES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. November 1, 1982; July 5, 1980;

Repealed Eff, January 3, 1984.

 

17 NCAC 07B .1107          EGG CLEANING DETERGENT

Sales of egg cleaning detergent to poultry farmers for use in cleaning eggs are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1108          EGG COOLING CABINETS

Sales of egg cooling cabinets to be placed or installed in or affixed to any commercially manufactured facility, enclosure or structure specifically designed, constructed and used for commercial purposes for housing, raising or feeding poultry are exempt from sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; August 1, 1988.

 

17 NCAC 07B .1109          FEED MILLS

Sales of feed mills to be placed or installed in or affixed to any commercially manufactured facility, enclosure or structure specifically designed, constructed and used for commercial purposes for housing, raising or feeding animals are exempt from sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; August 1, 1988.

 

17 NCAC 07B .1110          COOLING FANS

Sales of cooling fans to be placed or installed in or affixed to any commercially manufactured facility, enclosure or structure specifically designed, constructed and used for commercial purposes for housing, raising or feeding animals are exempt from sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; August 1, 1988; July 5, 1980.

 

17 NCAC 07B .1111          VENTILATORS

Ventilators which have no moving parts and which are installed in tobacco barns, other than bulk tobacco barns, are subject to the applicable statutory state and local sales or use tax.  The ventilators are a part of a building or structure and are not classified as farm machines or machinery.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1112          SILO UNLOADERS: BARN CLEANERS

Sales of silo unloaders and mechanical barn cleaners to be placed or installed in or affixed to any commercially manufactured facility, enclosure or structure specifically designed, constructed and used for commercial purposes for housing, raising or feeding animals are exempt from sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; August 1, 1988.

 

17 NCAC 07B .1113          MACHINERY STORAGE EQUIPMENT

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; August 1, 1988;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .1114          SCALES

Sales of scales to be placed or installed in or affixed to any commercially manufactured facility, enclosure or structure specifically designed, constructed and used for commercial purposes for housing, raising or feeding animals are exempt from sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; August 1, 1988.

 

17 NCAC 07B .1115          SNAPBEAN GRADERS

Snapbean graders are not used in the planting, cultivating, harvesting or curing of farm crops and are subject to the applicable statutory state and local sales or use tax when sold to farmers for use.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1116          LIQUID FERTILIZER APPLICATORS

Sales of liquid fertilizer applicators to farmers for use in planting or cultivating farm crops are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006.

 

17 NCAC 07B .1117          MECHANICAL POST HOLE DIGGERS

Sales of mechanical post hole diggers to farmers for use in building fences for use in their farming operations are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006.

 

17 NCAC 07B .1118          SICKLE GRINDERS

Sales of sickle grinders to farmers for use are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1119          TOBACCO TYING MACHINES

Sales of tobacco tying machines to farmers for use in harvesting tobacco crops are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006.

 

17 NCAC 07B .1120          COTTON BAGS AND SHEETS

Sales to farmers of cotton picking bags and cotton sheets for use in harvesting cotton are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; November 1, 1982.

 

17 NCAC 07B .1121          LITTER

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. September 12, 1981.

 

17 NCAC 07B .1122          RIGHT‑OF‑WAY EQUIPMENT

Sales of tractors and bush‑cutting equipment to power companies, railroad companies, counties, cities, and contractors for use in cutting and maintaining rights‑of‑way are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991; October 1, 1988.

 

17 NCAC 07B .1123          CERTAIN SALES TO COMMERCIAL ANIMAL FARMERS

For the purpose of this Rule, the word "animal" means swine, cattle, horses, mules, sheep, chickens, turkeys, fish, and other similar domestic animals held or produced for commercial purposes.  The word "commercial" means held or produced for income or profit and does not include the production of animals for one's personal use or consumption and not for sale.  Commercial animal farmers, contractors performing contracts with commercial animal farmers, and subcontractors performing contracts with general contractors who contract with commercial animal farmers may obtain a Streamlined Sales Tax Agreement Certificate of Exemption, Form E-595E, from the North Carolina Department of Revenue, to be executed by them and furnished to their vendors to establish the vendors' authority to exempt purchases by them from sales and use taxes.  If a Form E-595E is properly executed, a vendor is relieved of liability for any additional tax found to be due with reference to a sale for which the vendor did not charge sales tax in reliance on the fully completed certificate.  By executing a fully completed certificate, the purchaser assumes liability for any sales tax subsequently determined to be due.  The vendor is not protected in this manner without the certificate.  Vendors that do not choose to use the Form E-595E must maintain other written evidence adequate to support the conclusion that a sale is exempt from tax in accordance with the provisions of G.S. 105‑164.13(4c).

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; August 1, 1998; August 1, 1996; May 1, 1995; October 1, 1993;

June 1, 1992; February 1, 1988.

 

section .1200 – HOTELS:  MOTELS:  TOURIST CAMPS AND TOURIST CABINS

 

17 NCAC 07B .1201          TAxability of gross receipts

 

History Note:        Authority G.S. 105-164.4; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; October 1, 1993; October 1, 1991; August 1, 1988; July 1, 1984;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .1202          SUPPLIES AND EQUIPMENT

Sales to hotels, motels, inns, tourist camps, and tourist cabins and other places in which rooms, lodgings or accommodations are furnished for a consideration, of any supplies, equipment, or fixtures including but not limited to beds, bedding, bathroom supplies and furniture are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1203          SINGLE FAMILY COTTAGES

 

History Note:        Authority G.S. 105‑164.4; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. September 30, 1977;

Repealed Eff. January 3, 1984.

 

SECTION .1300 ‑ SALES IN INTERSTATE COMMERCE

 

 

17 NCAC 07B .1301          OUT‑OF‑STATE DELIVERIES

Sales within the State of tangible personal property that the vendor delivers to the purchaser at a point outside the  State, or that the vendor delivers to a common carrier or to the mails for transportation and delivery to the purchaser  at a point outside the State, are not subject to the applicable state and local sales or use tax if the property is not returned to a point within the State and the vendor furnishes acceptable proof of transportation to a point outside the  State.  The most acceptable proof of transportation and delivery to a point outside the State is any of the following:

(1)           A waybill or bill of lading made out to the seller's order calling for delivery.

(2)           An insurance or registry receipt issued by the United States Postal Service, or a postal service or receipt.

(3)           A trip sheet that is signed by the seller's delivery agent and shows the signature and address of the person who received the delivered goods outside the state.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 1999; August 1, 1998; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1302          IN‑STATE DELIVERIES

Sales of tangible personal property delivered in this state to the buyer or his agent, if such agent is not a common carrier, are subject to the applicable statutory state and local sales or use tax, notwithstanding that the buyer may subsequently transport, or employ someone else to transport, the property out of this state, except as provided by G.S. 105‑164.13.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; January 1, 1982;

February 8, 1981.

 

17 NCAC 07B .1303          DELIVERIES TO DONEES

A donee is a person to whom the buyer of tangible personal property gives the property without charge.  When a North Carolina retailer sells tangible personal property to a buyer and the retailer, at the direction of the buyer, delivers the property to the buyer's donee instead of to the buyer, the sale by the retailer is subject to applicable statutory State and local sales tax only if the delivery to the donee is made inside the State.  If the delivery to the donee is made outside the State, no State or local sales or use tax applies.  A retailer who, at the direction of a buyer, delivers property to the buyer's donee at a point outside the State must have acceptable proof of delivery in accordance with 17 NCAC 07B .1301.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; July 18, 2002; July 1, 1999; October 1, 1993; October 1, 1991; March 1, 1984; January 3, 1984.

 

17 NCAC 07B .1304          MACHINERY ENTERING STATE

When a North Carolina vendor sells tangible personal property and installs same on machinery or other property brought into this state for the purpose of having the property installed thereon and the North Carolina vendor delivers the property to the vendee at a point outside this state, the sale is consummated outside this state and is exempt from this state's tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .1305          FOREIGN COMMERCE: PURCHASES FOR EXPORT

Tangible personal property purchased for export and exempt from sales tax pursuant to G.S. 105‑164.13(33) will lose its exemption if it is not exported within 90 days of purchase.  Such property would then become subject to the applicable state and local use tax payable directly to the Department.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. October 1, 1993.

 

section .1400 – sales of medicines:  drugs and medical supplies

 

17 NCAC 07B .1401          prescription drugs

 

History Note:        Authority G.S. 105-164.13; 105-262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; October 1, 1993; May 1, 1990; August 1, 1988;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .1402          MEDICINES: SALES TO PHYSICIANS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; August 1, 1988;

Repealed Eff. July 1, 2000.

 

17 NCAC 07B .1403          NONPRESCRIPTION MEDICINES AND DRUGS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; August 1, 1988;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .1404          MEDICAL SUPPLIES AND EQUIPMENT

Sales to physicians, dentists, hospitals, or other users or consumers of medical instruments and laboratory equipment used to diagnose, prevent, treat, or cure disease are subject to applicable state and local sales or use tax.  Sales of medical equipment and medical supplies are also subject to applicable state and local sales or use tax, unless their sale is exempt under G.S. 105-164.13(12)d.  That statute exempts from tax durable medical equipment and related medical supplies that are covered under the Medicare or Medicaid program and are sold on either a certificate of medical necessity or a written prescription.  Items listed below are subject to tax, unless their sale is exempt under G.S. 105-164.13(12)d.  Items not included in the list may also be subject to tax:

(1)           Adhesive tape;

(2)           Alcohol;

(3)           Bandages;

(4)           Battery chargers;

(5)           Bed pans;

(6)           Betadine solution;

(7)           Blood glucose monitors;

(8)           Blood glucose test/reagent strips;

(9)           Blood or urine control strips;

(10)         Breathing circuits;

(11)         CO/2 saturation monitors and accessories;

(12)         Cotton;

(13)         Crutch and cane holders;

(14)         Cylinder tank carriers;

(15)         Dial-a-dose insulin delivery devices;

(16)         Dressings;

(17)         Exam gloves;

(18)         Gauze;

(19)         Knives;

(20)         I.V. hangers;

(21)         I.V. poles;

(22)         Lancets;

(23)         Microscopes;

(24)         Mouthpieces;

(25)         Needles;

(26)         Peak flow meters;

(27)         Percussors;

(28)         Pulse oximeters;

(29)         Rollabout chairs;

(30)         Scissors;

(31)         Sterile water;

(32)         Surgical gloves;

(33)         Syringes;

(34)         Tracheal suction catheters;

(35)         Tracheostomy care kits;

(36)         Tracheostomy cleaning brushes;

(37)         Tracheostomy masks and collars;

(38)         Tubing, sold by the linear foot or otherwise;

(39)         Urinals;

(40)         Urine test or reagent strips or tablets; and

(41)         X-ray machines.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105.164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; August 1, 1998; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .1405          INSULIN

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1988;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .1406          BLOOD PRODUCTS: BODY TISSUE

Transactions involving the procurement, processing, distribution or use of whole blood plasma, blood products, blood derivatives and other body tissue or organs that are to be injected, transfused or transplanted into the human body are deemed to be services and any charges therefor are exempt from sales or use tax pursuant to the provisions of G.S. 130A‑410.

 

History Note:        Authority G.S. 105‑164.3; 105‑262; 105‑264; 130A‑410;

Eff. February 1, 1976;

Amended Eff. July 1, 1989; September 14, 1977.

 

SECTION .1500 ‑ FINANCE COMPANIES: FINANCE CHARGES AND CARRYING CHARGES

 

 

17 NCAC 07B .1501          FINANCE COMPANIES

(a)  If a finance company maintains a regular place of business wherein repossessed tangible personal property is sold or placed on display for sale as an adjunct to the principal business of the finance company, such finance company must register with the department and collect and remit the applicable state and local tax on its sales.

(b)  If a finance company, as an incident only of its finance business, has occasion, from time to time, to repossess articles of tangible personal property upon which payments have become delinquent and sells such tangible personal property either at public auction or at private sale, such sales shall be deemed occasional sales and are not subject to the tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. June 1, 1992; October 1, 1991.

 

17 NCAC 07B .1502          FINANCE AND CARRYING CHARGES

 

History Note:        Authority G.S. 105‑164.3; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

section .1600 – sales to or by hospitals: educational: charitable or religious institutions: etc.: and refunds thereto

 

17 NCAC 07B .1601          SALES TO OR BY NONPROFIT ENTITIES

(a)  Sales To Nonprofits -- Sales of taxable tangible personal property to a nonprofit entity for use or consumption by that entity are subject to sales or use tax.  Nonprofit entities include hospitals not operated for profit, educational institutions not operated for profit, churches, and civic groups such as chambers of commerce, fraternities, sororities, and scout clubs. Sales of building materials, supplies, fixtures, and equipment to contractors for use in the performance of contracts with a nonprofit entity are also subject to sales or use tax.  A nonprofit entity must pay sales tax charged on its purchases and is liable for use tax on its purchases when no sales tax is collected.  A nonprofit entity that owes use tax must file a return in accordance with 17 NCAC 7B .0104.

(b)  Sales By Nonprofits. - Sales by nonprofit entities are subject to sales or use tax unless a specific exemption applies to the sale.  A nonprofit entity that makes taxable retail sales must register with the Department and file sales and use tax returns.  A nonprofit entity that is registered with the Department may execute a Streamlined Sales Tax Agreement Certificate of Exemption, form E-595E.  The certificate shall not be used for items the nonprofit entity intends to use or consume.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; July 1, 2000; October 1, 1993; October 1, 1991; January 1, 1982; July 5, 1980.

 

17 NCAC 07B .1602          REFUNDS TO NONPROFIT ENTITIES

(a)  Eligibility -- A nonprofit entity listed in G.S. 105-164.14(b) may file a claim for refund for sales or use tax paid by it on items purchased for its use and for sales and use tax paid indirectly by it on building materials, supplies, fixtures, and equipment that become part of a building it owns or leases and uses to conduct its nonprofit activity.  A claim for refund must be filed on a form provided by the Department.  A claim for refund applies to taxes paid during the period for which the claim for refund is filed.

(b)  Proof for Direct Purchases -- A claim for refund must be supported by documentation showing the amount of tax paid.  For items purchased by a nonprofit entity for its use, adequate documentation is an invoice or copy of an invoice that sets out the item purchased, the date of the purchase, the cost of the item, and the amount of sales or use tax paid.

(c)  Proof for Contractor Purchases -- A claim for refund for sales or use tax paid indirectly on building materials, supplies, fixtures, and equipment must be supported by adequate documentation showing the amount paid.  Adequate documentation is a certified statement from the contractor or subcontractor that purchased the items.  The statement must indicate the item purchased, the vendor from whom it was purchased, the invoice number of the purchase, the cost of the item, and the amount of sales or use tax paid.  Only items that become part of a building the nonprofit entity owns or leases and uses to conduct its nonprofit activity are eligible for a refund.  A contractor may not include in its statement items the contractor purchased and used to fulfill the contract but did not become part of the building constructed.  Examples of items that are not to be included in the contractor's statement are scaffolding, forms for concrete, fuel for the operation of machinery and equipment, tools, equipment repair parts, equipment rentals, and blueprints.

(d)  Items Not Refundable -- The refund provisions of this Rule do not apply to sales taxes incurred by employees on purchases of food, lodging, or other taxable travel expenses paid by employees and reimbursed by a nonprofit entity listed in G.S. 105-164.14(b).  These expenses are personal to the employee because the contract for food, shelter, and travel is between the employee and the provider and payment of the tax is by the employee individually and personally.  In this circumstance, a nonprofit entity has not incurred any sales tax liability and has not paid any sales tax; instead, it has chosen to reimburse a personal expense of the employee.  The refund provisions of this Rule do not apply to any of the following:

(1)           Charges for electricity and telecommunications services;

(2)           Occupancy taxes levied and administered by certain counties and cities in this State;

(3)           Prepared food and beverage taxes levied by various local governments in this State;

(4)           Highway use taxes paid on the purchase, lease, or rental of motor vehicles;

(5)           The white goods disposal tax levied on new white goods;

(6)           The scrap tire disposal tax levied on new tires; or

(7)           The dry-cleaning solvent tax levied on dry-cleaning solvent purchased by a dry cleaning facility.

 

History Note:        Authority G.S. 105-164.14; 105-262; 105-264; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; July 1, 2000; July 1, 1999; August 1, 1998; April 1, 1997;

August 1, 1996; October 1, 1993; March 1, 1993; June 1, 1992; October 1, 1991.

 

17 NCAC 07B .1603          PARENTS AND TEACHERS ASSOCIATIONS

The National Parent Teacher Association and its local units (parent teacher associations) are entitled to a refund of sales and use taxes paid in this state on their purchases of taxable tangible personal property for use in carrying on their work.

 

History Note:        Authority G.S. 105-164.14; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009.

 

17 NCAC 07B .1604          CONTRACTOR'S TOOLS

Claims for refund of taxes under the provisions of G.S. 105‑164.14 shall not include tax paid by a contractor on expendable tools, supplies and equipment which do not annex to or become a part of the building or structure.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .1605          CLUBS: ASSOCIATIONS: ETC.

Clubs, lodges, parents and teachers associations, scout councils and similar organizations which make regular retail sales of taxable tangible personal property must register with the Department of Revenue and pay the sales tax on such sales except as provided by G.S. 105‑164.13(34) and G.S. 105‑164.13(35).

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 1, 1982; July 5, 1980.

 

SECTION .1700 ‑ SALES TO OR BY THE STATE: COUNTIES: CITIES: AND OTHER POLITICAL SUBDIVISIONS

 

17 NCAC 07B .1701          GOVERNMENTAL SALES AND PURCHASES

(a)  General. -- With the exception of electricity and telecommunication and ancillary service, sales to State agencies are exempt from State and local sales or use taxes pursuant to G.S. 105-164.13(52), and from the privilege tax pursuant to Article 5F of Chapter 105 of the General Statutes.  The items must be purchased by the State agency for its own use pursuant to a valid purchase order issued by the agency that contains its exemption number and a description of the property purchased, or the items must be paid for with a State-issued check, electronic deposit, credit card, procurement card, or credit account of the agency.  For all purchases other than by an agency-issued purchase order, the agency must provide to or have on file with the retailer the agency's exemption number.  The exemption does not apply to sales of tangible personal property to contractors for use in the performance of contracts with State agencies or to sales of tangible personal property to employees of State agencies.  Sales to counties, cities, and other political subdivisions are subject to the applicable State and local tax.

(b)  A governmental unit that sells tangible personal property at retail is considered to be a retailer.  The reporting, payment, and other requirements that apply to a nongovernmental entity apply to a governmental entity unless a law exempts the governmental entity from the requirement.

(c)  DOT. -- Sales to the Department of Transportation are exempt from State and local sales and use tax.  This exemption does not apply to sales of tangible personal property to contractors for use in the performance of contracts with the Department of Transportation nor to sales of tangible personal property to employees of the Department of Transportation.

 

History Note:        Authority G.S. 105-164.3; 105‑164.4; 105‑164.6; 105-164.13; 105-187.52; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; August 1, 1998; August 1, 1996; October 1, 1993; October 1, 1991; May 1, 1990; February 1, 1987.

 

17 NCAC 07B .1702          REFUNDS TO COUNTIES, CITIES, AND OTHER GOVERNMENTAL ENTITIES

G.S. 105-164.14(c) lists the governmental entities that are allowed an annual refund of sales and use taxes as well as the sales and use taxes for which a refund is allowed.  The entities listed are eligible for refunds of sales and use taxes paid on their purchases to the same extent as other nonprofit entities.  Rule 17 NCAC 7B .0602 addresses refunds for nonprofit entities.  Governmental entities must file an annual claim for refund, however, instead of a semiannual claim for refund.  The annual claim requirement does not apply to a hospital or another medical facility that is an agency of a county or city and has received approval from the Secretary to file a claim for refund on a semiannual basis.  Rule 17 NCAC 7B .1802 explains this approval process.

 

History Note:        Authority G.S. 105-164.14; 105-262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; August 1, 1998; April 1, 1997; August 1, 1996; October 1, 1993; October 1, 1991; May 1, 1990; February 1, 1997.

 

17 NCAC 07B .1703          SALES TO STATE

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; July 5, 1980;

Repealed Eff. August 1, 1998.

 

17 NCAC 07B .1704          GOVERNMENTAL ENTITIES NOT ELIGIBLE FOR REFUNDS

G.S. 105-164.14(c) lists the governmental entities that are eligible for refunds of sales and use taxes.  A governmental entity that is not listed in that subsection is not eligible for a refund.  The governmental entities that are not eligible for a refund include the following:

(1)           An alcoholic beverage control board.

(2)           A community college established under G.S. 115D.

(3)           A drainage district.

(4)           A housing authority.

(5)           The North Carolina Civil Air Patrol, a State agency created by G.S. 143B-490.

 

History Note:        Authority G.S. 105‑164.6; 105‑164.14; 105‑262;

Eff. February 1, 1976;

Amended Eff. April 1, 1999; October 1, 1993; May 1, 1990; July 5, 1980.

 

17 NCAC 07B .1705          HOUSING AUTHORITIES

Sales of taxable tangible personal property to housing authorities created and existing under Chapter 157 of the North Carolina General Statutes for use in carrying on their activities are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; August 1, 1988; March 1, 1984.

 

17 NCAC 07B .1706          PRISON CONCESSION STANDS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264;

Eff. October 1, 1991;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .1801          SALES TO AND BY HOSPITALS AND SIMILAR INSTITUTIONS

(a)  General -- Hospitals, sanitariums, nursing homes, and rest homes are primarily engaged in rendering services and are considered the users or consumers of all tangible personal property they purchase for use in connection with these institutions.  These institutions are liable for payment of sales or use tax on their purchases of tangible personal property except as explained in this Rule.

(b) Food -- Purchases of food by hospitals, sanitariums, nursing homes, or rest homes for use in furnishing meals to patients are exempt from State tax, but not the 2% local tax, if the food could be purchased under the Food Stamp Program.  If food purchased by an institution could not be purchased under that Program, the food is subject to both State and local sales or use tax.  If, in addition to furnishing meals to patients, one of these institutions operates a cafeteria from which it makes sales of prepared meals or food to guests, visitors, employees, staff, or other persons, the institution must register with the Department of Revenue and collect and remit the tax on its sales.  If the food purchased by the institution for use in furnishing meals to patients cannot be distinguished from the food purchased for resale through the cafeteria, the institution may purchase all the food under a certificate of resale.  An institution that does this assumes liability for payment of sales or use tax on food used in furnishing meals to its patients and on sales of meals by the cafeteria.

(c) Meals to Students -- Meals and food products sold by a hospital operated by a State or private educational institution to student nurses are exempt from tax in accordance with G.S. 105-164.13(27).

(d) Purchases for Consumption -- Except as provided by Paragraph (b) of this Rule, a Certificate of Resale, Form E-590, may not be used by hospitals, sanitariums, nursing homes, or rest homes when making taxable purchases of tangible personal property for use or consumption.  The tax due on taxable purchases from North Carolina suppliers or out‑of‑state suppliers who charge North Carolina sales or use tax must be paid to the suppliers.  An institution that makes taxable purchases from an out-of-state supplier who does not collect and remit North Carolina sales or use tax must register with the department and remit monthly the tax due on the purchases.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105-467;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; May 1, 1999; August 1, 1998; October 1, 1993; October 1, 1991; July 1, 1989.

 

17 NCAC 07B .1802          REFUNDS TO HOSPITALS AND SIMILAR MEDICAL FACILITIES

(a) Most Nonprofits -- Hospitals and other medical facilities that are listed in G.S. 105-164.14(b)(1) through (4) are eligible for refunds as nonprofit entities.  Rule 17 NCAC 7B .0602 addresses refunds for nonprofit entities.

(b) County and City Facilities -- Sales or use taxes paid on purchases by hospitals and other medical facilities that are agencies of a county or city are refundable to the same extent as sales or use taxes paid on purchases by other nonprofit hospitals, but the county or city must file the claim for refund.  This requirement applies unless the facility has submitted a written request to the Secretary to file a semiannual refund claim on its own behalf, rather than have its purchases included in the county’s or city’s annual refund claim, and the request has been approved by the Secretary.  An approved request becomes effective on the date set by the Secretary and applies to sales and use taxes paid on or after the effective date.

(c) Other Facilities. - Hospitals and other medical facilities not covered by Paragraphs (a) and (b) of this Rule are not eligible for sales and use tax refunds.

 

History Note:        Authority G.S. 105-164.14; 105-262; 105-264;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; August 1, 1998; April 1, 1997; August 1, 1996; October 1, 1993; October 1, 1991; May 1, 1990; May 1, 1985.

 

17 NCAC 07B .1803          OXYGEN EQUIPMENT

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .1804          OXYGEN

Sales of oxygen and oxygen dispensing equipment to hospitals, sanitariums, nursing homes or rest homes for use in administering oxygen to patients are subject to the applicable statutory state and local sales or use tax.  Sales of oxygen on written prescription of a physician or dentist are exempt from sales tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; January 1, 1982.

 

17 NCAC 07B .1805          HOSPITAL SUPPLIES

Sales of linens, soap, toilet paper, kleenex‑type tissues, and other supplies to sanitariums, hospitals and similar institutions and businesses for use are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

section .1900 - TIRE RECAPPERS AND RETREADERS: TIRE AND TUBE REPAIRS

 

17 NCAC 07B .1901          TIRE RECAPPING MATERIALS

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262;

Eff. February 1, 1976;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .1902          SECONDHAND TIRES

Sales to users or consumers of secondhand tires that have been recapped or retreaded are subject to sales or use tax on the full sales price without any deduction whatever on account of any trade‑in credit or allowance.  Sales to users or consumers of unrecapped or unretreaded secondhand tires are also subject to sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000.

 

17 NCAC 07B .1903          TIRE REPAIR MATERIALS

17 NCAC 07B .1904          sales by tire recappers

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; 

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .1905          SALES TO TIRE RECAPPERS

(a)  Sales to tire recappers of camelback or other rubber products, cement and rubber solvent, cord fabric, wheel weights and other items of a similar nature which enter into or become an ingredient or component part of the recapped tires or are attached to and delivered with the tires to the customer are exempt from tax.

(b)  The gross receipts derived by a utility from sales of electricity to tire recappers for use in connection with the operation of the recapping plant are subject to tax at the rate set in G.S. 105-164.4.  Sales of other fuel, except piped natural gas, to tire recappers for use in connection with the operation of the recapping plant are exempt from sales tax.  Sales of piped natural gas are exempt from sales tax and are subject to the excise tax imposed by Article 5E of G.S. 105.

(c)  Sales to tire recappers of mill machinery, or parts and accessories therefor, for use exclusively in the recapping process are exempt from sales tax.  Sales to contractors and subcontractors of mill machinery or mill machinery parts and accessories for use by them in the performance of contracts with manufacturing industries and plants and sales to subcontractors purchasing mill machinery or mill machinery parts and accessories for use by them in the performance of contracts encompassed in such contracts with manufacturing industries and plants are exempt from sales tax. Such mill machinery or mill machinery parts and accessories must be for use by tire recappers in the production process, as the term "production" is defined in 17 NCAC 07D .0102(a)(1), to qualify for the exemption from sales and use tax when purchased by such contractors or subcontractors.  Contractors and subcontractors may obtain Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, from the Taxpayer Assistance Division, North Carolina Department of Revenue, to be executed by them and furnished to their vendors in connection with such purchases as the vendor's authority to apply the exemption.  The following items when sold to tire recappers for use exclusively in the recapping process are considered to be mill machinery or mill machinery parts and accessories within the meaning of the Sales and Use Tax Article:

(1)           wire brushes;

(2)           mold lube;

(3)           curing tubes and rims;

(4)           molds and matrices;

(5)           buffing equipment;

(6)           buffing discs;

(7)           buffing rasps;

(8)           rasp teeth;

(9)           crayons for marking tires;

(10)         tire trimmers;

(11)         boilers;

(12)         tire handling equipment used exclusively between the beginning and ending steps of the recapping process;

(13)         inspection spreaders used exclusively to inspect casings being recapped;

(14)         spinners used for applying cement used on casings being recapped;

(15)         pre‑condensing tanks for air lines used for applying cement, dusting buffed casings, and inflating curing tubes;

(16)         casing balancers used exclusively in balancing casings to be recapped;

(17)         tread builders used to apply tread rubber to casings being recapped;

(18)         air compressors used exclusively in retreading or recapping process;

(19)         dust collectors;

(20)         knives, stitchers, rollers, shears, awls, and splicing tools used to perform work on the ingredient material or the manufactured product;

(21)         thermometers, pyrometers, and durometers used in testing mold heat and cure hardness of the rubber used in the recapping process;

(22)         bagging and debagging equipment;

(23)         sprayers used exclusively in the recapping process;

(24)         matrix loaders;

(25)         steam traps and valves used in steam lines for curing molds; and

(26)         mold cleaners.

(d)  The following are examples of items which are subject to the applicable statutory state and local sales or use tax when sold to tire recappers for use or consumption:

(1)           motor vehicle jacks;

(2)           tire tools not used between the beginning and ending recapping processes;

(3)           balancing machinery used after recapping process is completed;

(4)           equipment used to remove tires from the rim before the recapping process begins;

(5)           administrative equipment such as office supplies, file cabinets and other office equipment;

(6)           cleaning compounds for janitorial and sanitary purposes;

(7)           uniforms for employees;

(8)           advertising materials;

(9)           lubricants, repair parts and accessories for motor vehicles;

(10)         inspection bags; and

(11)         gloves.

(e)  The lists in Paragraphs (c) and (d) of this Rule are not intended to be exclusive but are for illustrative purposes only.  If there is any question as to the tax status of any item not on the lists, it may be submitted to the Secretary of Revenue for a determination as to the applicable rate of tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; July 1, 1999; October 1, 1993; June 1, 1992; October 1, 1991; May 1, 1985.

 

17 NCAC 07B .1906          SCRAP TIRE DISPOSAL FEE

 

History Note:        Authority G. S. 105‑262; 105‑264; 130A‑309.55; 130A‑309.56;

Eff. October 1, 1990;

Amended Eff. June 1, 1992;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .1907          SCRAP TIRE DISPOSAL TAX

(a)  The taxable event for tires that are purchased for the purpose of lease or rental occurs at the time the tires are purchased and the scrap tire tax is due at that time.  The receipts from the lease or rental of tires are not subject to the scrap tire tax but they are subject to the sales or use tax.  The scrap tire tax shall be computed on the selling price of the tire including the federal excise tax but excluding the sales tax.

(b)  Purchases of new tires from outside North Carolina for storage, use or consumption in North Carolina or to be placed on a vehicle offered for sale, lease or rental are subject to tax at the rate established in G.S. 105‑187.16(b).

(c)  The scrap tire disposal tax is not to be reported on a tire vendor's sales and use tax report but it is to be reported on the Scrap Tire Disposal Tax Report, Form E‑500G.  Taxpayers who are making sales or purchases of tires that are subject to the tax in accordance with the above information must register for this purpose.

 

History Note:        Authority G.S. 105‑187.16; 105‑187.17; 105‑262; 105‑264;

Eff. October 1, 1991;

Amended Eff. October 1, 1993; June 1, 1992.

 

SECTION .2000 ‑ SALES AND GIFTS BY EMPLOYERS TO EMPLOYEES OR OTHER USERS

 

17 NCAC 07B .2001          SALES TO EMPLOYEES

Sales of tangible personal property by any employer, manufacturer, processor, wholesaler, distributor or jobber to his employees or others for use or consumption are subject to the applicable statutory state and local sales or use tax, unless specifically exempt, notwithstanding that such sales are infrequent or comprise only a small fraction of the vendor's total business, and every employer, manufacturer, processor, wholesaler, distributor or jobber making such sales must register with the department and collect and remit the tax due thereon.  The fact that any such vendor only makes sales to his employees shall not relieve him of this requirement.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2002          GIFTS TO EMPLOYEES

Gifts of tangible personal property by any employer, manufacturer, processor, wholesaler, distributor or jobber to his employees or other persons are subject to the applicable statutory state and local sales or use tax, unless the donor paid sales or use tax on the sales or purchase price of the donated property at the time he acquired the same.  The tax due by reason of any such gift shall be paid by the donor and shall be computed on the donor's cost price of the property donated, irrespective of whether fabricated, produced, manufactured or processed by the donor, or acquired elsewhere.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

Section .2100 – electricity: piped natural gas: bottled gas: coal: coke: fuel oil: oxygen: acetylene: hydrogen: liquefied petroleum gas and other combustibles

 

17 NCAC 07B .2101          ELECTRICITY AND OTHER FUEL

(a)  Electricity. - Electricity is tangible personal property and its sale is subject to tax at the rates set in G.S. 105-164.4.  Local sales and use taxes do not apply to sales or purchases of electricity.

(b)  Other Fuel. - The sale of bottled gas, coal, coke, fuel oil, oxygen, acetylene, hydrogen, liquefied petroleum gas, or another combustible to a user or consumer is subject to the applicable statutory state and local tax unless the sale is exempt from tax under G.S. 105‑164.13.  Sales of piped natural gas are exempt from sales tax and are subject to the excise tax imposed by G.S. 105, Article 5E.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105-164.16; 105‑262; 105-467; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; July 1, 2000; August 1, 1998; October 1, 1993; October 1, 1991; May 1, 1990; August 1, 1986.

 

17 NCAC 07B .2102          SAWDUST USED AS FUEL

Sales of sawdust to manufacturing plants for use as a fuel in connection with the manufacturing operation are exempt from sales and use tax.

 

History Note:        Authority G.S. 105-164.13; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009.

 

17 NCAC 07B .2103          PROPANE SOLD TO SCHOOLS

Sales of propane gas to public and private schools for use or consumption are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2104          LP GAS SOLD TO FARMERS

Sales of liquefied petroleum gas to a poultry farmer for use in chicken brooders are exempt from sales and use tax.

 

History Note:        Authority G.S. 105-164.13; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009.

 

17 NCAC 07B .2105          AVIATION FUEL

Sales of aviation gasoline and other aviation fuel to users or consumers in this state are subject to the applicable statutory state and local sales or use tax. The federal tax on aviation gasoline or other aviation fuels which is levied by Chapter 32, Section 4081, of the Internal Revenue Code and the federal super fund tax are imposed on gasoline sold by any producer, terminal operator or importer of gasoline and shall be included in the sales price of aviation gasoline on which North Carolina sales tax is due.  The federal tax on noncommercial aviation gasoline and the federal tax on liquids sold for use or used for fuel in noncommercial aviation as levied by the provisions of Chapter 31, Section 4041, of the Internal Revenue Code, are taxes imposed at the retail level and these taxes are not includable in the sales price upon which North Carolina sales tax is due.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; October 1, 1990; January 3, 1984.

 

section .2200 - FOOD AND FOOD PRODUCTS FOR HUMAN CONSUMPTION

 

17 NCAC 07B .2201          FOOD AND FOOD PRODUCTS

(a)  General. - All retail sales of food or food products are subject to applicable statutory State and local sales or use tax unless a statute exempts the sales from tax.  G.S. 105-164.13B lists the food that is exempt from State tax, but not the two percent local tax.

(b)  Exempt Cafeteria Food. - The schools, institutions, and organizations whose sales of food and meals are exempt under G.S. 105-164.13(26), (26a), or (27) are not required to register with the Department.  Therefore, unless one of these entities is otherwise required to register with the Department by reason of making other sales or purchases subject to the sales or use tax, it cannot furnish a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, to its suppliers.  When making purchases of food to be sold, one of these entities that is not registered must give the supplier information to the effect that the food purchased is to be sold by the entity's school cafeteria or dining room, and the supplier must enter this information on its records and on the sales invoices.  Otherwise, the transactions may be subject to the tax.  Registered schools, institutions, and organizations must furnish a properly executed Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, to a supplier to purchase food without paying tax on the purchase.

 

History Note:        Authority G.S. 105‑164.4; 105-164.6; 105‑164.13; 105‑262; 105-467; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; August 1, 2002; May 1, 1999; August 1, 1998; October 1, 1993; October 1, 1991; February 1, 1986; May 11, 1979.

 

17 NCAC 07B .2202          DISPOSABLE LUNCHROOM SUPPLIES

Sales to school lunchrooms and dining rooms of disposable items such as paper cups, paper napkins and drinking straws which actually contain or otherwise accompany the sale or service of the food and which are actually used by the students in consuming the meals are exempt from the tax.  This exemption does not include brooms, mops, soaps, chinaware, silverware and other equipment or supplies, and sales of this nature are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2203          EMPLOYEES' MEALS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; February 1, 1986;

Repealed Eff. July 1, 1994.

 

17 NCAC 07B .2204          MEALS ON TRAINS: PLANES: ETC.

Sales of prepared foods or meals by railroads, Pullman cars, steamships, airlines or other transportation company diners, while within this state, are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2205          CATERERS

All charges by persons engaged in the catering business that are connected with the furnishing, preparing or serving of meals, foods, and other tangible personal property to users or consumers are subject to the applicable statutory state and local sales or use tax.  If such persons perform other services that are not a part of the charges for the furnishing, preparing or serving of meals, foods, and other tangible personal property, the charges for such services rendered are exempt from tax provided such charges are separately stated from the charges for the tangible personal property on the invoice given to the customer at the time of the sale and in the vendor's records; otherwise, the total amount is subject to the tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .2206          GRATUITIES

 

History Note:        Authority G.S. 105‑164.4; 150‑164.13A; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980;

Repealed Eff. February 8, 1981.

 

17 NCAC 07B .2207          FOOD SERVICE SUPPLIES

Paper doilies, paper place mats, paper coasters, paper napkins, drinking straws and similar disposable items which become a part of the sale or service of food and are expended by customers in consuming their meals are exempt from sales or use tax when sold to school lunchrooms, restaurants, cafes, cafeterias and other such places of business selling and serving prepared meals and foods.  Sales of plastic or cloth place mats, cork, plastic or china coasters, china, silverware, cloth napkins, tablecloths or other reusable items to restaurants, cafes, cafeterias and other similar places of business for use in serving meals and not for resale are subject to the applicable statutory state and local sales or use tax. Sales of patty paper and paper containers to restaurants for use in storing food are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .2208          Fraterity and Sorority Meals

 

History Note:        Authority G.S. 105-164.13; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .2209          SCHOOL STORES' SALES

Sales of tangible personal property by school stores to students and other users or consumers are subject to sales tax.  Such school stores must register with the Department of Revenue and collect and remit the tax on such sales.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993.

 

17 NCAC 07B .2210          MEALS AT SUMMER CAMPS

(a)  Summer camps that make a weekly or monthly charge to persons who are enrolled in the courses or activities carried on by the summer camps are not liable for collecting tax on such charges.  Such organizations are liable for payment of the tax on their purchases of food and other tangible personal property for use in the operation of the camps.

(b)  Camps that operate cafeterias or restaurants where they make sales of meals and other tangible personal property to students or other users or consumers shall register and collect and remit the tax on the sales price of such property.  Camps where rooms, lodgings or accommodations are regularly furnished to transients for a consideration are deemed to be retailers and must collect and remit the tax on such receipts.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; July 5, 1980.

 

17 NCAC 07B .2211          Cover Charge

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .2212          SEAFOODS

A person who purchases fish or other seafood and sells them at retail is liable for collecting the two percent local sales or use tax on the sales unless the sales are considered prepared food as defined in G.S. 105-164.3(28).  Prepared food is subject to the applicable statutory state and local sales and use tax.  Sales of fish and seafood are exempt when sold in their original or unmanufactured state by a fisherman in his capacity as a fisherman.

 

History Note:        Authority G.S. 105-164.4; 105-164.13; 105-262; 105-467; Article 39; Article 40; Article 42;

Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; May 1, 1999; August 1, 1998; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2213          SERVICE CHARGE

A service charge is exempt from sales tax under G.S. 105-164.13A only if it meets the conditions in that statute.  If a service charge does not exceed 20% of the sales price and personnel who are not directly involved in the service of food, beverages, or meals receive part of the service charge, then none of the service charge is exempt.  If a service charge exceeds 20% of the sales price and personnel who are directly involved in the service of food, beverages, or meals receive an amount equal to 20% of the sales price, the amount received by them is exempt if the service charge is separately stated as required by G.S. 105-164.13A.  In this circumstance, if the personnel who are directly involved do not receive an amount equal to 20% of the service charge, then none of the charge is exempt.  The amount of a service charge that exceeds 20% of the sales price is subject to tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13A; 105‑262;

Eff. January 3, 1984;

Amended Eff. July 1, 2000; October 1, 1993.

 

SECTION .2300 ‑ SALES TO OUT‑OF‑STATE MERCHANTS FOR RESALE

 

17 NCAC 07B .2301          IN GENERAL

(a)  For the purpose of the Sales and Use Tax Law, the term "registered nonresident retail or wholesale merchant" means a person who does not have a place of business in this State, is engaged in the business of acquiring by purchase, consignment or otherwise, tangible personal property and selling the property outside this State and is registered for sales and use tax purposes in a taxing jurisdiction outside this State.

(b)  Sales of tangible personal property to registered nonresident retail or wholesale merchants for resale are exempt from the North Carolina sales tax, if all of the following conditions are met:

(1)           The wholesale merchant who sells tangible personal property for resale delivers to the nonresident retail or wholesale merchant a bill of sale for each sale of merchandise whether sold for cash or on credit, itemizing therein the various articles of tangible personal property included in said sale, and makes and retains a duplicate or carbon copy of each such bill of sale, and keeps a file of all such duplicate bills of sale for at least three years from the date of sale.

(2)           The character of such tangible personal property is such as the nonresident retail or wholesale merchant ordinarily and customarily purchases as a part of his stock for resale.

(3)           The nonresident retail or wholesale merchant is registered for sales and use tax purposes in a taxing jurisdiction outside this State and furnishes each wholesale merchant with a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, certifying that he is a registered nonresident retail or wholesale merchant, and further certifying that the tangible personal property purchased by him from the wholesale merchant is purchased for the purpose of resale at retail or wholesale in accordance and compliance with the laws of the jurisdiction in which he resides or does business.  Such Form E-595E, when completed and executed by the nonresident retail or wholesale merchant and delivered to the supplier, shall be deemed sufficient evidence that such nonresident retail or wholesale merchant is duly registered in a taxing jurisdiction outside this State and is engaged in the business of a retail or wholesale merchant purchasing tangible personal property at wholesale for legitimate sale in the taxing jurisdiction in which he resides or does business.

(c)  The exemption in Paragraph (b) of this Rule shall apply only to sales of tangible personal property to nonresident retail or wholesale merchants for resale who comply with the terms and conditions hereof, and shall not be construed to apply to any sales of tangible personal property to users or consumers not for resale irrespective of the price, quantity or any other circumstances or conditions pertaining to such sale.  Failure to comply with the provisions of this requirement shall subject the vendor to liability for the applicable rate of tax upon all sales which do not conform to this Rule.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.5; 105‑262;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; February 1, 1988.

 

17 NCAC 07B .2302          INTERSTATE SALE

Sales made by merchants in North Carolina to out‑of‑state purchasers where actual delivery of the property is made by the resident vendor to such nonresident vendee at a point beyond the boundaries of this state and actual possession is retained by the vendor until delivery is made, or where the delivery is made by a resident vendor to a common carrier for delivery to such nonresident vendee at a destination beyond the boundaries of this state, are sales in interstate commerce. Streamlined Sales Tax Agreement Certificates of Exemption, Form E-595E, are not required for sales in interstate commerce.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; February 1, 1988.

 

17 NCAC 07B .2303          REGISTRATION: WHOLESALER'S RESPONSIBILITY

 

History Note:        Authority G.S. 105‑164.3; 105‑164.5; 105‑262;

Eff. February 1, 1976;

Repealed Eff. February 1, 1988.

 

17 NCAC 07B .2401          SALES OF MEDICAL SUPPLIES AND EQUIPMENT TO VETERINARIANS

A veterinarian is a physician.  Therefore, sales to a veterinarian of medical instruments, laboratory equipment, medical supplies, and medical equipment used to diagnose, prevent, treat, or cure disease are subject to applicable State and local sales or use tax.  Rule 17 NCAC 7B .1404 lists medical items that are subject to tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; August 1, 1996; April 1, 1995; October 1, 1993; October 1, 1991; August 1, 1986.

 

17 NCAC 07B .2402          SALES BY VETERINARIANS

Sales by veterinarians are subject to sales or use tax unless a specific exemption applies to the sale.  A veterinarian who makes taxable retail sales must register with the Department and file sales and use tax returns.  A veterinarian who is registered with the Department may obtain a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E.  The certificate can be used to purchase, without payment of tax, items the veterinarian is purchasing for resale.  If a veterinarian uses an item, such as flea powder, soap, or pet food, in providing professional services and also sells the same type of item, the veterinarian may not know when purchasing the item whether the veterinarian will use the item or sell it.  For items of this type, the veterinarian may use the Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, to purchase the item without payment of tax.  The veterinarian is then liable for remitting the applicable use tax, if the veterinarian uses the item, or the applicable sales tax, if the veterinarian sells the item.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; July 1, 2000; June 1, 1992; August 1, 1986; May 11, 1979.

 

SECTION .2500 ‑ FURNITURE AND STORAGE WAREHOUSEMEN

 

 

17 NCAC 07B .2501          WAREHOUSEMEN SERVICES

Receipts derived from services rendered by warehousemen in moving, storing, packing and shipping tangible personal property belonging to other persons are not subject to the tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .2502          MOVING AND PACKING MATERIALS

Crating, boxing, packaging and packing materials purchased by warehousemen to be used by them in moving, storing, packing or shipping tangible personal property are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2503          SECONDHAND FURNITURE

Except as provided in 17 NCAC 7B .2504, sales by warehousemen of secondhand furniture or other tangible personal property to which they have acquired title are subject to the applicable statutory state and local sales or use tax and warehousemen making such sales must register with the department and collect and remit the tax due on such sales.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2504          SALES TO SATISFY LIENS

Sales made at auction by warehousemen to satisfy their liens existing on account of any moving, storing or other service charge are deemed to be occasional or isolated sales and are not subject to the tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑262;

Eff. February 1, 1976.

 

SECTION .2600 ‑ LIABILITY OF CONTRACTORS: USE TAX ON EQUIPMENT  BROUGHT INTO STATE: BUILDING MATERIALS

 

 

 

17 NCAC 07B .2601          USE TAX ON EQUIPMENT BROUGHT INTO STATE

 

History Note:        Authority G.S. 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; May 1, 1990; December 1, 1984;

Repealed Eff. August 1, 1996.

 

17 NCAC 07B .2602          CONTRACTORS, SUBCONTRACTORS, AND RETAILER-CONTRACTORS

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; 105-264; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff.  October 1, 2009; August 1, 2002; October1, 1993; June 1, 1992; October 1, 1991; February 8, 1981;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .2603          WEIGH HOPPERS SOLD TO CONTRACTORS

Sales of asphalt plants, concrete plants, weigh hoppers or other equipment to contractors who produce concrete or asphalt for use in fulfilling their contracts are taxable at the applicable statutory state and local sales or use tax, and no maximum tax is applicable thereto.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; December 1, 1984; July 5, 1980.

 

17 NCAC 07B .2604          SAND: STONE SOLD TO CONTRACTORS

Sales of sand, dirt, and stone to contractors or other users or consumers or to nonregistered merchants are subject to the applicable statutory state and local sales or use tax unless such property is sold in its original or unmanufactured state by the producer in his capacity as a producer.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2605          SANDBLAST SAND SOLD TO CONTRACTORS

Sales of sandblast sand to contractors for use in the performance of contracts to clean ships, buildings, etc., are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2606          PRE‑FABRICATED BUILDINGS: CONTRACTORS

Sales of pre‑fabricated buildings to contractors, builders, or other users or consumers in this state are subject to the applicable statutory state and local sales or use tax.    A pre-fabricated building is not a modular home as defined under G.S. 105-164.3(21b).

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; October 1, 1993; October 1, 1991; October 1, 1990.

 

17 NCAC 07B .2607          SUBCONTRACTORS

Subcontractors are liable for payment of the applicable statutory state and local sales or use tax on the taxable tangible personal property which they purchase for use in fulfilling their subcontracts unless such property is exempt from sales and use tax.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43;

Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .2608          PLUMBING: HEATING CONTRACTORS: PURCHASES

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262;

Eff. February 1, 1976;

Amended Eff.  October 1, 2009; October 1, 1993; October 1, 1991;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .2609          PLUMBING: HEATING CONTRACTORS: SALES

(a)  Contractors who do not sell at retail in the regular course of business are not required to collect tax by reason of occasional or isolated retail sales.  However, those contractors who have not been classified as retailer‑contractors, but who regularly or consistently make retail sales are liable for collecting and remitting the tax on the sales price of the property.  This includes items sold across‑the‑counter such as materials, supplies and fixtures as well as appliances such as refrigerators, ranges and water heaters which the contractors might install as a part of the sale.  Contractors making sales of this nature must register with the Department and pay tax monthly on such sales.  Since contractors are not eligible to execute certificates of resale, they will have to pay tax on their purchases to the suppliers; however, the tax paid on the purchase price of property which is resold may be deducted on the monthly returns from the tax due on the sales price of such property.

(b)  Any contractor required to remit tax on his sales who feels that he should be classified as a retailer‑contractor should submit full particulars regarding the nature of his business to the Secretary for a determination of his classification.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .2610          PLUMBING: HEATING RETAILER‑CONTRACTORS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .2611          BUILDING MATERIALS

All building materials, supplies, fixtures, and equipment of every kind and description that become a part of or are annexed to any building or other structure are subject to applicable State and local sales and use taxes.  Vendors of these items must register and collect and remit the tax on their sales to contractors and other users or consumers.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. August 1, 2002; October 1, 1993; June 1, 1992; October 1, 1991; February 1, 1988.

 

17 NCAC 07B .2612          LUMBER SOLD TO COMMERCIAL FISHERMEN

Sales to commercial fishermen of lumber or other boat components or parts for use by them in building or repairing boats for their use in the taking or catching commercially of shrimp, crab, oysters, clams, scallops and fish, both edible and nonedible, are exempt from sales and use taxes under the provisions of G.S. 105‑164.13(9).

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

SECTION .2700 ‑ DENTISTS: DENTAL LABORATORIES AND DENTAL SUPPLY HOUSES

 

 

17 NCAC 07B .2701          SALES TO DENTISTS AND ORTHODONTISTS

Dentists and orthodontists are deemed to be the users or consumers of tangible personal property which they purchase for use in rendering professional services.  With the exception of false teeth and orthopedic appliances which are specifically exempt from tax, all sales of tangible personal property to dentists and orthodontists, including dental supplies, equipment, furnishings and other property, such as materials which dentists fabricate into false teeth, are subject to the four percent state tax and any applicable local sales or use tax.  The term "false teeth" includes dentures and artificial restoration of teeth; however, as stated in this Rule, the exemption for false teeth does not apply to sales of materials to dentists which they use in fabricating false teeth.  The term "orthopedic appliances" includes headgear, bows, neckstraps, wires, bands, brackets, rubber bands and jackscrews when such items are purchased by orthodontists to be assembled into various types of appliances to be worn on the person of the owner or user and other orthopedic appliances when the same are designed to be worn on the person of the owner or user.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; January 3, 1984; November 1, 1982.

 

17 NCAC 07B .2702          SALES TO DENTAL LABORATORIES

(a)  Sales to dental laboratories of tangible personal property which becomes a component part of false teeth, dentures or artificial restoration of teeth being fabricated by such laboratories are not subject to sales or use tax.

(b)  Sales to dental laboratories of machinery and equipment, and accessories thereto for use directly in the fabricating of false teeth are subject to the one percent rate of sales or use tax with a maximum tax of eighty dollars ($80.00) per article.  Sales to contractors and subcontractors purchasing such machinery and equipment or parts and accessories thereto for use by them in the performance of contracts with dental laboratories and sales to subcontractors of such machinery and equipment or parts and accessories thereto for use by them in the performance of contracts encompassed in such contracts with dental laboratories are taxable at the one percent rate of sales or use tax, subject to a maximum tax of eighty dollars ($80.00) per article where applicable when the machinery and equipment or parts and accessories thereto are used by such dental laboratories directly in the fabricating of false teeth.  Contractors and subcontractors may obtain Contractor's and Subcontractor's Certificate, Form E‑580, from the Office Services Division, Taxpayer Assistance Section, North Carolina Department of Revenue, to be executed by them and furnished to their vendors in connection with such purchases as the vendor's authority to apply the one percent rate of tax thereto.

(c)  Sales to dental laboratories of tangible personal property which does not become a component part of false teeth, or which is not used directly in the fabricating of the false teeth are subject to the four percent state and any applicable local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; 105‑264;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; June 1, 1992; October 1, 1991; January 1, 1982.

 

17 NCAC 07B .2703          DENTAL SUPPLY HOUSES

Dental supply houses making taxable sales are required to register with the Department and collect and remit the tax on such sales.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

section .2800 – florist: nurserymen: greenhouse operators and farmers

 

17 NCAC 07B .2801          FLORISTS: NURSERYMEN: GREENHOUSE OPERATORS AND FARMERS

(a)  Retail sales of wreaths, bouquets and similar items are subject to the applicable statutory state and local sales or use tax.

(b)  Retail sales of flowers, potted plants, shrubbery and similar nursery stock and retail sales of fruits, vegetables and other farm products are subject to the applicable statutory state and local sales or use tax unless the product in question is a product of the farm and is sold in its original state by the producer of the product who is not primarily a retail merchant at the location where the product is sold.

(c)  For the purpose of the exemption afforded by G.S. 105-164.13(4b), nurserymen and greenhouse operators are considered to be farmers.  Nursery stock which is not sold during the season in which it was purchased by the nurserymen, greenhouse operators and other farmers but is retained until the next season and growth is added thereto by virtue of such retention is considered to be a product of the farm and is exempt from sales and use taxes when sold by such nurserymen, greenhouse operators or farmers who are not selling primarily as retail merchants.

(d)  Nurserymen, greenhouse operators and other types of farmers that make retail sales of farm products that they have produced which are in their original state are not liable for collecting and remitting sales tax on these sales unless they are selling primarily in their capacity as retail merchants.  Such vendors are selling primarily as producers when the total dollar sales volume of their produced farm products in the original state regularly exceeds fifty percent of the total dollar sales volume of their purchased products and their produced products.  Such vendors are selling primarily in their capacity as retail merchants when their total dollar sales volume of purchased products regularly exceeds fifty percent of the total dollar sales volume of their purchased and produced products.  Such classification shall remain in effect until either category of sales on a regular basis has changed to another principal type.  If such producer‑vendors operate more than one location, the preceding is applicable to the total dollar sales volume of each location separately.  The total dollar sales volume to be used in determining the classification of "producer" or "retail merchant" shall include all sales of tangible personal property without regard to any items or sales that might otherwise be exempt from tax by the Sales and Use Tax Statutes.

(e)  If such vendors are not classified primarily as retail merchants on the basis of the total dollar sales volume, sales of their produced products in the original state are exempt from tax; however, retail sales of any farm products or any other taxable merchandise acquired by purchase are subject to any applicable tax.  If such vendors are classified primarily as retail merchants on the basis of the total dollar sales volume, they shall be liable for tax accordingly; i.e., all retail sales of both types of products shall be subject to the tax unless specific sales are statutorily exempt from tax.

(f)  When vendors who are not primarily retail merchants make sales of farm products produced by them and products acquired by purchase, separate records must be maintained of sales of products produced by them.  Records of purchased products, as well as sales thereof, must be kept and maintained in a manner that can be accurately and conveniently checked by the agents of the Secretary of Revenue; otherwise, all sales are subject to the tax.

(g)  Producers making taxable sales must register with the Department of Revenue for the purpose of collecting and remitting the tax due thereon.

(h)  When nurserymen, greenhouse operators, florists or other persons make taxable sales of shrubbery, young trees or similar items, and as a part of the transaction transplant them to the land of the purchaser for a lump sum or a flat rate, the entire amount of the transaction is subject to the applicable statutory state and local sales or use tax unless such vendors segregate on the invoice that portion of the charge which is for the property sold and that portion of the charge which is for transplanting.

(i)  For the purpose of the exemption afforded by G.S. 105-164.13(4b), nurserymen and greenhouse operators are considered to be farmers; therefore, the fact that they may be selling tangible personal property primarily as a retailer and not as a producer does not preclude their purchases of tangible personal property for use from any exemption listed in G.S. 105-164.13.  17 NCAC 07B .1101 provides additional information regarding exemptions.

 

History Note:        Authority G.S. 105‑164.4; 105-164.4A; 105‑164.6; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006;July 1, 2000; October 1, 1993; June 1, 1992; October 1, 1991;

March 1, 1987.

 

17 NCAC 07B .2802          FLORISTS' DELIVERY ASSOCIATIONS

The tax due on transactions conducted through a florists' delivery association must be collected and remitted to the Department pursuant to the following principles:

(1)           All delivery and service charges associated with taxable sales of flowers or other tangible personal property in North Carolina, whether delivered to the purchaser or to a person other than the purchaser, are considered to be a part of the sales price and subject to the applicable statutory state and local sales or use tax.

(2)           Service or relay charges to purchasers for orders accepted in North Carolina and forwarded to other florists through a florist delivery association, regardless of whether the charges are separately stated on the bill to the purchaser, constitute a part of the sales price and are subject to the applicable statutory state and local sales or use tax.

(3)           A North Carolina florist receiving orders from other florists within or without North Carolina for delivery within or without North Carolina is not liable for any tax on the receipts derived from these transactions.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; April 1, 1999; October 1, 1993; October 1, 1991; March 1, 1987.

 

section .2900 – vending machines

 

17 NCAC 07B .2901          SALES THROUGH VENDING MACHINES

(a)  Requirement -- A person who sells tangible personal property through a vending machine must register with the Department and remit sales tax on the sales price of the property sold, unless the sale is exempt from tax.  The sale of an item in a vending machine for one cent is exempt from tax.

(b)  Sales Price -- The "sales price" of an item sold in a vending machine differs depending on the item.  For tobacco products sold through vending machines, the sales price is 100% of the price at which the item is sold in the vending machine.  For all other items, the sales price is 50% of the price at which the item is sold in the vending machine.  A vending machine retailer may calculate receipts from items sold, separate the receipts from items that are taxable at 100% of their price from those that are taxable at 50% of their price, and then divide the receipts by the appropriate number to determine the amount of receipts on which sales tax is due. 

 

History Note:        Authority G.S. 105-164.3; 105‑164.4; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; July 1, 2000; October 1, 1993; June 1, 1992; July 1, 1989.

 

17 NCAC 07B .2902          SALES OF VENDING MACHINES

Sales of vending machines to any person for use are subject to the applicable statutory state and local sales or use tax.  The lease or rental of vending machines to users are subject to the applicable statutory state and local sales or use tax.  Sales of vending machines to registered merchants for leasing purposes or for the purpose of resale are not subject to the tax when supported by properly executed Streamlined Sales Tax Agreement Certificates of Exemption, Form E-595E.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .2903          EXCLUSION OF TAX FROM RECEIPTS

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. March 1, 1993; July 1, 1989; August 1, 1988; July 5, 1980;

Repealed Eff. July 1, 2000.

 

17 NCAC 07B .3001          TRADE‑INS

Sales or use tax must be computed and paid on the full gross sales price of a new article without any deduction for any trade‑in credit or allowance.  The sale of a used article by the vendor who accepted it in trade as a credit or part payment on the sale of a new article is also subject to tax at the gross sales price.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; June 1, 1995; October 1, 1993; May 1, 1990; January 3, 1984.

 

17 NCAC 07B .3002          REPOSSESSIONS

Retailers shall not deduct from their gross taxable sales the unpaid amounts on repossessed merchandise.  However, where a retailer repossesses an article of tangible personal property pursuant to either a limited or full recourse endorsement by such retailer to a financing institution and he resells such tangible personal property to recover the unpaid sales price, such resale is not subject to sales tax provided the sales tax was paid on the gross sales price of the initial sale.  Otherwise, the sale of any repossessed article is subject to the applicable statutory state and local sales or use tax.  The full gross sales price of any used article taken in trade by the vendor as a credit or part payment of the sales price of such nontaxable repossessed article is subject to the applicable statutory state and local sales or use tax when sold at retail.

 

History Note:        Authority G.S. 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; May 1, 1990; January 3, 1984.

 

17 NCAC 07B .3003          RETURNED MERCHANDISE

If an article sold is returned and the sale is rescinded by a refund of the entire amount paid including tax, the vendor is entitled to obtain a refund of or credit for the sales or use tax paid to the Department by reason of the initial sale of such merchandise.  The records of the taxpayer must clearly reflect and support his claim for any such refund or credit.

 

History Note:        Authority G.S. 105‑164.41; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .3004          SECONDHAND PROPERTY

(a)  Tax Status -- The original stock in trade of a retailer is not limited to newly manufactured articles.  Therefore, the fact that property is used or secondhand does not exempt it from sales or use tax.  Retail sales of secondhand property acquired by any means other than repossession are subject to sales or use tax.

(b)  Purchases -- When a vendor acquires property in any of the following circumstances, the property is considered to have been purchased and is therefore subject to tax:

(1)           the vendor reacquires property that is collateral for a nonrecourse endorsement given by the vendor to a financial institution; or

(2)           the vendor accepts secondhand or other property in lieu of commissions.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; October 1, 1993; October 1, 1991; January 3, 1984.

 

17 NCAC 07B .3005          REPAIR PARTS FOR USED PROPERTY

Sales of repair parts to registered merchants for use in reconditioning used property for sale to other registered merchants for resale are exempt from tax when such parts are sold pursuant to a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E.

 

History Note:        Authority G.S. 105‑164.5; 105‑262;

Eff. February 1, 1976;

Amended Eff. May 1, 2009.

 

17 NCAC 07B .3006          PARTS FROM JUNKED AUTOS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .3007          REPAIR PARTS FOR EXEMPT PROPERTY

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. May 1, 1990.

 

17 NCAC 07B .3008          TRADE‑UP: SALES OF USED ARTICLES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .3009          TRANSFER OF REPOSSESSED ITEMS TO NEW BUSINESS

A repossessed item that is in the inventory of a business and would be exempt under G.S. 105-164.13(16) if sold by the business becomes taxable when the business dissolves and transfers its inventory to a successor business entity.  This applies to all business reformulations except a merger of two or more business entities in which the inventory is transferred to the surviving business entity.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 2000; October 1, 1993; October 1, 1991; November 1, 1982.

 

17 NCAC 07B .3010          TRADE‑INS ON EXEMPT SALES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991;

Repealed Eff. July 1, 2000.

 

17 NCAC 07B .3011          USED PROPERTY SOLD FOR REPAIR CHARGES

The retail sale of taxable tangible personal property that is left with merchants for repair or storage and is sold to satisfy repair or storage charges because the owners fail to reclaim it within a stipulated period of time is subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3012          TRADE: GRAIN FOR FLOUR

Bags of flour or corn meal given by a miller to a customer in exchange for grain which is placed in the miller's inventory does not constitute a taxable transaction.  The charge by a miller to mill a customer's own grain which is returned to the customer is not subject to sales tax.  Grain bartered for dissimilar merchandise is subject to the applicable statutory state and local sales or use tax on the usual retail selling price of the merchandise received for the grain.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3013          USED PARTS FROM JUNKED PROPERTY

Retail sales of used parts that have been removed from junked tangible personal property, including motor vehicles, by persons engaged in the business of selling the parts are subject to the applicable sales tax.  When repossessed articles are dismantled and their parts are sold at retail, the parts have lost their identity as repossessed articles and are subject to tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. March 1, 1993;

Amended Eff. July 1, 2000.

 

SECTION .3100 ‑ RADIO AND TELEVISION STATIONS: MOTION PICTURE THEATRES

 

17 NCAC 07B .3101          RADIO AND TELEVISION: ETC. RECEIPTS

Receipts of radio and television companies for the broadcasting or telecasting of programs are not subject to sales or use tax.  Receipts of motion picture theatres derived from admission charges are not subject to sales or use tax.  Motion picture theatres making taxable sales of tangible personal property through concession stands or otherwise must register with the department and must collect and remit the applicable statutory state and local sales or use tax on such sales.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3102          BROADCASTING EQUIPMENT

(a)  Sales of broadcasting equipment and parts and accessories thereto and towers to commercial radio or television companies which operate under the regulation and supervision of the Federal Communications Commission are exempt from sales and use tax.  Taxable tangible personal property purchased by the radio and television companies other than towers, antennas and broadcasting equipment or parts and accessories thereto is subject to the applicable statutory state and local sales or use tax.

(b)  Sales to a cable service provider of broadcasting equipment, parts, and accessories attached to the equipment are exempt from sales and use tax.  The term broadcasting equipment does not include cable.  Therefore, cable and other tangible personal property not considered broadcasting equipment, parts, and accessories attached to the equipment are subject to the applicable statutory state and local sales and use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105-164.13; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; October 1, 1993; October 1, 1991; December 1, 1984; March 1, 1984.

 

17 NCAC 07B .3103          RENTAL OF FILMS: RECORDINGS

Receipts derived from the lease or rental of motion picture film or prerecorded videotape cassettes to theaters or similar businesses for exhibition to the public and receipts derived from the lease or rental of such film or prerecorded videotape cassettes to schools, churches, hospitals, prisons and similar institutions and organizations for exhibition to students, congregations, patients and inmates are exempt from sales or use tax.  Receipts derived from the lease or rental of motion picture film or prerecorded videotape cassettes to businesses, individuals, organizations and other lessees for any use other than for public exhibition are subject to the applicable statutory state and local sales or use tax.  Projection equipment, screens, advertising matter and other tangible personal property which are leased, rented or sold at retail for use in showing film, videotape cassettes, DVDs, or any other prerecorded formats are subject to the applicable state and local sales or use tax regardless of whether the film or videotape is privately or publicly exhibited.

 

History Note:        Authority G.S. 105-164.4; 105-164.13; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; April 1, 1997; October 1, 1993; October 1, 1991; November 1, 1982;

January 1, 1982.

 

17 NCAC 07B .3104          BROADCASTING ACCESSORIES

Sales of slide or film projectors, screens, and photographic supplies and equipment, including cameras, bulbs, film, blank videotape cassettes, chemicals, paper, and other photographic developing equipment to television companies operating under the regulation and supervision of the Federal Communications Commission are subject to the one percent rate of tax with an eighty dollar ($80.00) maximum tax per article when the items are used in producing pictures and similar material used in the programming of the television station.  This Rule has no application to sales of the above items to amateur photographers.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1998; June 1, 1992.

 

17 NCAC 07B .3105          SALES OF DEVELOPED FILM TO TELEVISION STATIONS

The sale of developed film to commercial television stations which operate under the regulation and supervision of the Federal Communications Commission for use by them in broadcasting and telecasting programs is exempt from sales and use tax.

 

History Note:        Authority G.S. 105-164.13; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993.

 

17 NCAC 07B .3106          CABLE SERVICE PROVIDERS

(a)  Sales of broadcasting equipment and parts and accessories attached to the equipment to a cable service provider are exempt from sales and use tax.  Examples include towers and antenna.  The term "cable service provider," as used in this Rule, means a cable television company that receives consideration from its subscribers and uses broadcasting equipment and parts and accessories and a tower to receive and prepare signals for transmission over their cable systems and also is regulated and supervised by the Federal Communications Commission.

(b)  The sale of developed movie film to cable service providers which operate under the regulation and supervision of the Federal Communications Commission for use by them in broadcasting and telecasting programs is exempt from sales and use tax.

(c)  Antenna cable, transmission cable, trunk, feeder and drop cable, and tangible personal property purchased by cable service providers other than towers, antennas and purchases of broadcasting equipment and parts and accessories thereto are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13;105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. March 1, 1984;

Amended Eff. August 1, 2009; April 1, 1997; October 1, 1993; October 1, 1991; August 1, 1986; December 1, 1984.

 

17 NCAC 07B .3107          MOTION PICTURE PRODUCTION FIRMS

(a)  Sales to motion picture production firms of cameras, film and props or building materials used in the construction of sets which are used in the actual filming of movies for sale, lease or rental are exempt from sales and use tax.  The sale of chemicals and equipment used to develop and edit film which is used to produce release prints is exempt from sales and use tax.

(b)  Sales of machinery and equipment and other property to motion picture production firms for use in receiving tangible personal property and other activities such as raw materials storage, finished goods storage, distribution or administration is subject to the applicable statutory state and local sales or use tax.

(c)  The purchase of film by a movie production company which becomes a component part of release prints that are actually produced and sold, leased or rented to its customers are exempt from sales and use tax.  Also, chemicals which are used to develop release prints that are for sale, lease or rental are exempt from tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; 105-164.13; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. June 1, 1992;

Amended Eff. October 1, 2009; October 1, 1993.

 

section .3200 - TELECOMMUNICATIONS AND TELEGRAPH COMPANIES

 

17 NCAC 07B .3201          TELECOMMUNICATIONS AND TELEGRAPH COMPANIES

(a)  Sales to telecommunications and telegraph companies regularly engaged in providing telephone and telegraphic services to subscribers on a commercial basis of central office equipment, switchboard and private branch exchange equipment and prewritten computer programs used in providing telecommunications service to subscribers are subject to the one percent sales or use tax with a maximum tax of eighty dollars ($80.00) per article.  For the purpose of determining the items that may be properly included in the terms central office equipment, switchboard equipment and private branch exchange equipment, reference is made to Accounts 2124, 2211, 2212, 2215, 2220, 2231, 2232, 2311, and 2341 of Title 47‑‑Telecommunication Chapter 1, Part 32, Uniform System of Accounts For Telecommunications Companies, of the Federal Communications Commission's rules and regulations as revised to January 1, 1988, which are hereby incorporated by reference.  This Rule has no application to future changes in the Federal Communications Commission's rules and regulations until such changes are reviewed by the Secretary of Revenue to determine the application of tax to the tangible personal property affected by such changes.  Copies of these Rules and Regulations may be obtained from the Secretary's Office, Room 202, Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554, at a fee of ten cents ($0.10) per page.

(b)  Accounts 2211, 2212, 2215, 2220, 2231 and 2232; Central Office Equipment.  These accounts include switchboards and other equipment, instruments and apparatus necessary to the functions of central offices. Sales to and purchases by the above‑referred to telecommunications and telegraph companies of the items included in Central Office Equipment Accounts, are subject to the one percent sales or use tax with a maximum tax of eighty dollars ($80.00) per article, irrespective of whether the items are classified in the Uniform System of Accounts as capital expenditures or as maintenance expense.  Examples of items contained in Central Office Equipment Accounts 2211, 2212, 2215, 2220, 2231 and 2232 and taxable at the general State rate plus any applicable local rate are:

(1)           aisle‑lighting equipment attached to buildings;

(2)           building alterations when tangible personal property not properly termed central office equipment is affixed or attached to or in any manner becomes a part of a building or structure;

(3)           cable, other than that connecting central office units to each other or to distributing frames;

(4)           covers for transmission power apparatus;

(5)           desks and tables unless equipped with central office equipment when purchased;

(6)           foundations for engines and other equipment when part of building;

(7)           loading coils used outside central office, loud speaker equipment, operators' chairs;

(8)           platforms, rolling ladders, tarpaulins, ticket holders, toll ticket carriers;

(9)           water stills for battery service; and

(10)         tools and portable testing equipment regardless of where used.

(c)  Account 2124 ‑ General Purpose Computers.  This account includes any computer system used to test, diagnose, maintain and control more than one type of telecommunications plant in addition to computers which are used to perform general administrative information processing activities.  Equipment used for the testing, diagnosis, maintenance, or control of more than one type of central office equipment is taxable at the one percent rate subject to the eighty dollar ($80.00) maximum tax per article, whether classified under the Uniform System of Accounts as capital expenditures or as maintenance expense; however, all other equipment in this account is subject to tax at the general State rate plus any applicable local rate.

(d)  Account 2311 - Station Apparatus.  This account includes private branch exchange equipment in addition to station apparatus.  Equipment which is properly included in the term private branch exchange equipment is taxable at the one percent rate subject to the eighty dollar ($80.00) maximum tax per article, whether classified by the Uniform System of Accounts as capital expenditures or as maintenance expense; however, all other equipment in this account is subject to tax at the general state rate plus any applicable local rate.  Examples of items that are contained in Account 2311 and are taxable at the general State rate are desk sets, hand sets, wall sets, mobile telephone equipment, backboards, battery boxes, booths, coil collectors, station wiring, protectors, arresters, ground rods, clamps, wire and similar associated equipment.

(e)  Account 2341 - Large Private Branch Exchange.  This account contains equipment and apparatus necessary to the operation of the above named exchanges.  The equipment and apparatus contained in this account which are properly included in the term private branch exchange equipment are subject to the one percent sales or use tax with a maximum tax of eighty dollars ($80.00) per article, whether classified under the Uniform System of Accounts as capital expenditures or as maintenance expense, but does not include any tangible personal property which is station apparatus.  Examples of items that are included in Account 2341 and are taxable at the general State rate are operators' chairs and equipment.

(f)  Telecommunications Services. - G.S. 105-164.4(a)(4c) and G.S. 105-164.4C govern the taxation of telecommunications services.

(g)  Property Sale or Lease. - A telecommunications company that sells or leases equipment or other tangible personal property is liable for collecting and remitting applicable State and local sales and use taxes on the receipts from the sales or leases.  Tax due on the sale or lease of property by a telecommunications company is payable in the same manner as tax due on the sale or lease of property by any other retailer; it is due monthly, quarterly, or semimonthly in accordance with G.S. 105-164.16.

 

History Note:        Authority G.S. 105‑164.4; 105-164.4A; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2002; April 1, 1999; October 1, 1993; October 1, 1991; October 1, 1990; July 1, 1989.

 

17 NCAC 07B .3202          TELEPHONE COMPANY PROPERTY SUBJECT TO GENERAL RATE

All sales to telephone and telegraph companies of tangible personal property not properly included in the terms central office equipment, switchboard equipment, private branch exchange equipment or prewritten computer programs used in providing telephone services to their subscribers, as explained in 17 NCAC 07B .3201 are subject to the general State tax and any applicable local sales or use tax.  This includes all canned or prewritten computer programs to be used for administrative purposes unless specifically exempt by statute; all equipment, materials, supplies and apparatus to be used for distribution purposes; all building materials, supplies, fixtures and equipment of every kind and description annexed to or in any manner becoming a part of a building or structure; apparatus or equipment chargeable to other accounts pursuant to the instructions set out in the notes appearing under Accounts 2124, 2211, 2212, 2215, 2220, 2231, 2232, 2311 and 2341 in Part 32, Uniform System of Accounts For Telecommunications Companies, of the Federal Communications Commission's telecommunication rules and regulations which are hereby incorporated by reference including subsequent amendments and revisions.  Copies of these Rules and Regulations may be obtained from the Secretary's Office, Room 202, Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554, at a fee of ten cents ($0.10) per page.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2002; October 1, 1993; October 1, 1991; March 1, 1984; January 1, 1982.

 

17 NCAC 07B .3203          TOLL OR PRIVATE TELECOMMUNICATIONS SERVICES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. July 1, 1989;

Amended Eff. October 1, 1991; October 1, 1990;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .3204          CELLULAR TELECOMMUNICATIONS COMPANIES

(a)  One %, eighty dollars ($80.00) Maximum Rate on Purchases -- The preferential one percent, maximum eighty dollars ($80.00) per article rate in G.S. 105-164.4A(3) applies to cellular telephone companies.  Sales to these companies of the following items are subject to this preferential rate:

(1)           Antennas;

(2)           Antenna cable used in transmitting the radio signals from the microwave antenna to the microwave transmitter or receiver;

(3)           Central office telecommunications equipment;

(4)           Microwave transmitters and receivers;

(5)           Prewritten computer programs used in providing telecommunications services to subscribers;

(6)           Radio channel units;

(7)           Switchboard or private branch exchange equipment; and

(8)           Towers to support antennas used to transmit and receive signals of microwave radios used in providing telephonic quality communications.  For the purpose of applying the maximum tax, a tower is considered to be a single article only when the complete tower is sold by the same vendor.

(b)  Rates on Services and Sales -- Cellular services are subject to tax under G.S. 105-164.4C as mobile telecommunications services.  Sales or leases of radio telephone equipment to subscribers are subject to the general State tax and any applicable local sales or use taxes.

 

History Note:        Authority G.S. 105-164.4; 105-164.4A; 105‑164.6; 105‑262; 105‑264;

Eff. June 1, 1992;

Amended Eff. August 1, 2002; July 1, 2000; October 1, 1993.

 

SECTION .3300 ‑ ORTHOPEDIC APPLIANCES

 

17 NCAC 07B .3301          EXEMPT PROSTHETIC DEVICES

(a)  Exemption.  G.S. 105-164.13(12) exempts from sales and use tax prosthetic devices as defined in G.S. 105-164.3(30b).  The exemption includes orthodontic materials that are purchased by an orthodontist for assembly into an appliance to be worn by a patient.  Prosthetic devices are exempt regardless of whether they are sold on prescription.

(b)  Specific Items. -- The Sales and Use Tax Technical Bulletins contain a list of exempt prosthetic devices and a list of orthodontic materials that are considered to be exempt prosthetic devices when they are purchased by an orthodontist for assembly into an appliance.  An item that is not included in these lists may also be exempt.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; April 1, 1999; August 1, 1998; October 1, 1993; October 1, 1991; July 1, 1989; February 1, 1986.

 

17 NCAC 07B .3302          EXEMPT DURABLE MEDICAL EQUIPMENT

(a)  Devices. -- G.S. 105-164.13(12) exempts from sales and use tax durable medical equipment as defined under G.S. 105-164.3(8b) when sold on prescription.  The Sales and Use Tax Technical Bulletins contain a list of items that are exempt from tax as durable medical equipment when sold on prescription.  An item not included in the list in the Bulletins may also be exempt from tax when sold on prescription.

(b)  Records. - A vendor who sells durable medical equipment pursuant to a written prescription must keep sales records that segregate these sales.  The vendor must keep the original prescription for inspection by the Secretary of Revenue or an agent of the Secretary.

 

History Note:        Authority G.S. 105‑164.4; 105-164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; April 1, 1999; August 1, 1998; October 1, 1993; June 1, 1992; October 1, 1991; February 1, 1986.

 

17 NCAC 07B .3303          APPLIANCES IMPLANTED IN PATIENTS

17 NCAC 07B .3304          PROTECTIVE HELMETS FOR PATIENTS

17 NCAC 07B .3305          HEARING AIDS

17 NCAC 07B .3306          INVALID WALKERS: WALKING CANES

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. August 1, 1998.

 

section .3400 - MEMORIAL STONE AND MONUMENT DEALERS AND MONUMENT MANUFACTURERS

 

17 ncac 07b .3401          memorial stone sales

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; December 1, 1994; October 1, 1993; June 1, 1992; October 1, 1991;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .3402          MONUMENT MANUFACTURERS:  TOOLS AND SUPPLIES

Sales to monument manufacturers of stencils, abrasives and cutting tools and equipment used by such manufacturers in the cutting, shaping, and polishing process and the solvents used to remove the stencils from the monuments are exempt from sales and use tax.  Monument dealers who do not cut, shape, polish and otherwise process monuments are not classified as manufacturers and sales of stencils and other supplies to monument dealers for use in lettering or polishing monuments which they sell are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13;105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3403          SUPPLIES TO INSTALL MEMORIAL STONES/MONUMENT/BRONZE GRAVE MARKERS

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; December 1, 1994; October 1, 1993; October 1, 1991;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .3404          BRONZE GRAVE MARKERS

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. December 1, 1994.

 

SECTION .3500 ‑ MACHINISTS: FOUNDRYMEN:  AND PATTERN MAKERS

 

17 NCAC 07B .3501          MACHINISTS:  FOUNDRYMEN:  PATTERN MAKERS

(a)  Sales to users or consumers of dies, castings, patterns, tools, machinery and any other tangible personal property made by machinists, foundrymen or pattern makers, and parts and other tangible personal property fabricated and sold for use or consumption on or with such items of tangible personal property, are subject to the applicable statutory state and local sales or use tax unless exempt from the tax under the provisions of Paragraph (b) of this Rule.

(b)  The following sales of any such property are exempt from tax:

(1)           For use or consumption by the holder of a standard commercial fishing license issued under G.S. 113-168.2 for principal use in commercial fishing operations; the holder of a shellfish license issued under G.S. 113-169.2 for principal use in commercial shellfishing operations; and the operator of a for-hire boat, as defined in G.S. 113-174, for principal use in the commercial use of the boat.

(2)           For use or consumption by or on ocean-going vessels plying the high seas in interstate or foreign commerce in transporting freight or passengers for hire exclusively.

(c)  The tax due shall be computed at the applicable rate on the full selling price of such property, including charges for any services that go into the fabrication, manufacture or delivery thereof.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13; 105-262; 105-264; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; June 1, 1992; October 1, 1991; January 1, 1982.

 

17 NCAC 07B .3502          MOLDS: DIES: MILL MACHINERY

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; October 1, 1988;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .3503          MOLDS: DIES: FOR RESALE

Sales of molds, patterns or dies to manufacturers for resale to their customers are exempt from tax and classified as wholesale sales when such sales are supported by completed Streamlined Sales and Use Tax Agreement Certificates of Exemption, Form E-595E.  Manufacturers are considered to be purchasing such items for resale only when title thereto and the right of possession thereof will pass to their customers and the manufacturer‑vendors' books, records and invoices show that such items are actually sold to their customers.

 

History Note:        Authority G.S. 105‑164.5; 105‑262;

Eff. February 1, 1976;

Amended Eff. May 1, 2009.

 

17 NCAC 07B .3504          MOLDS: DIES: RETAINED BY SELLER

Manufacturers making sales of molds, patterns or dies to users or consumers in this state shall register with the Department of Revenue for the purpose of collecting and remitting the tax due on such sales.  If manufacturers make retail sales of molds, patterns or dies to manufacturer-customers within and without this state, with the right of possession and title thereto passing to such customers, the manufacturer-customers are exempt from sales and use tax when the manufacturers selling the molds, patterns or dies retain them in their possession within this state for use in manufacturing tangible personal property for sale to such customers.  Out-of-state manufacturers making retail sales of molds, patterns or dies to customers within this state are not required to collect and remit North Carolina sales or use taxes on such sales when the out-of-state manufacturers retain the molds, patterns or dies in their possession for their use outside this state in manufacturing tangible personal property for sale to such customers.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993.

 

17 NCAC 07B .3505          MOLDS: DIES: NONMANUFACTURERS' USE

Manufacturers making retail sales of molds, patterns or dies to nonmanufacturing users or consumers within and without this state, with right of possession and title thereto passing to such customers, are liable for collecting and remitting the applicable statutory state and local sales or use tax on such sales, when the manufacturers selling the molds, patterns or dies retain them in their possession within this state for use in manufacturing tangible personal property for sale to such customers.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; October 1, 1988.

 

17 NCAC 07B .3506          MOLDS: DIES: RECORD KEEPING

Manufacturers making retail sales of molds, patterns or dies, with the right of possession and title thereto passing to their customers, must separately state the charges therefor from any charges for other tangible personal property sold to such customers in their books and records and on the sales invoices given to the customers at the time of the sale.

 

History Note:        Authority G.S. 105-164.22; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009.

 

section .3600 - FUNERAL EXPENSES

 

17 NCAC 07B .3601          FUNERAL EXPENSES

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; June 1, 1992; October 1, 1991; February 1, 1987;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .3602          CREMATION CHARGES

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. February 1, 1986;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .3603          DEATH BENEFIT PAYMENTS

 

History Note:        Authority G.S. 105-164.13; 105-262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980;

Repealed Eff. August 1, 2009.

 

section .3700 - LUBRICANTS: OILS AND GREASES

 

17 ncac 07b .3701          lubricating service

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .3702          SALES OF LUBRICANTS

Sales of motor oils, transmission or differential oils or greases, or other similar oils and greases by lubricating stations, service stations, garage operators, and similar businesses to users or consumers are subject to the applicable statutory state and local sales or use tax, unless an exemption applies.  The sale of a lubricant to a manufacturer for use in lubricating production machinery is exempt from sales and use tax.  A business that sells taxable oil or grease must collect and remit the applicable tax to the Department.

 

History Note:        Authority G.S. 105-164.4; 105-164.13; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; April 1, 1999; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3703          car wash businesses

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991;

Repealed Eff. September 1, 2018.

 

SECTION .3800 ‑ PREMIUMS: GIFTS AND TRADING STAMPS

 

17 NCAC 07B .3801          PREMIUMS AND GIFTS

Sales to a retailer of tangible personal property for use by the retailer as premiums or gifts are subject to the applicable statutory state and local sales or use tax and the purchaser shall remit the tax on the purchases to his suppliers.  If the suppliers are located outside this state and do not collect the North Carolina sales or use tax on the purchases, the purchaser shall remit such tax directly to the Department.  If the property purchased is of the character customarily sold by the retailer, he may purchase the same without payment of the tax if he furnishes his supplier with a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E.  In this case, the retailer must remit to the Department the tax on all taxable articles withdrawn from stock and used as premiums or gifts.  The provisions of this Rule do not apply to any purchases of property to be used in redeeming trading stamps or other media.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3802          SALES OF TRADING STAMPS

Sales of trading stamps to a registered merchant, whether a trading stamp company or other retailer, are deemed to be sales for the purpose of resale and such sales are not subject to the tax.  When the retailer distributes the stamps to his customers in connection with retail sales of other property, the stamps are considered to be included in the price of the items purchased by such customers.  Sales to a trading stamp company of catalogues, stamp books, advertising matter or other tangible personal property furnished free to retail merchants or used by the trading stamp company to promote its stamp program are subject to the applicable statutory state and local sales or use tax.  Sales of such items to other retail merchants are also subject to said tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3803          REDEMPTION OF TRADING STAMPS

(a)  Trading stamp companies which redeem trading stamps are deemed to be engaged in the business of selling tangible personal property at retail for a consideration.  The companies must register with the Department and collect and remit the applicable statutory state and local sales or use tax due on all the sales.  The tax shall be computed on the redemption value of the stamps, stamp book, or other media which the trading stamp company accepts for the premium.

(b)  A trading stamp company or other vendor which sells goods and trading stamps to a retailer who will himself redeem the stamps shall secure a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, from the retailer since, in such instances, the trading stamp company or other vendor is deemed to be selling tangible personal property for the purpose of resale.  The retailer is liable for the applicable statutory state and local sales tax on the redemption value of the stamps, stamp book or other media which he accepts for any premium.

(c)  If a trading stamp company or other merchant has questions relative to any transaction or operation involving the use of trading stamps, premiums or gifts, the trading stamp company or other merchant may submit all pertinent facts relating thereto to the Department for a ruling as to its tax status.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3804          GIFT CERTIFICATES

Charges by vendors for gift certificates which can be exchanged for merchandise are not subject to sales tax.  When the holder of such gift certificates exchanges the certificate for merchandise, the transaction is subject to the applicable statutory state and local sales or use tax.  The basis for the tax is the sales price of the property.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

SECTION .3900 ‑ CONTAINERS: WRAPPING: PACKING AND SHIPPING MATERIALS

 

 

17 NCAC 07B .3901          CONTAINERS: WRAPPING: PACKING AND SHIPPING MATERIALS

(a)  Sales to manufacturers, producers, wholesalers, and retailers of wrapping paper, labels, bags, cartons, and the other items specified in G.S. 105‑164.13(23)a. are not subject to tax if they are used for packaging, shipping, or delivering tangible personal property sold at wholesale or retail and they constitute a part of the sale of the property and are delivered with the property to the customer.  Except for the items described in Paragraph (b) of this Rule, this exemption does not apply to items that are used solely for delivery purposes and do not become a part of the sale of tangible personal property.

(b)  Sales of containers, such as barrels and drums, that are used to package tangible personal property for delivery to the customer and are returned to the owner for reuse are not subject to tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1998; October 1, 1993; October 1, 1991; April 1, 1986; May 11, 1979.

 

17 NCAC 07B .3902          HOGSHEADS: CARDBOARD CONTAINERS: ETC.

Sales of wooden hogsheads, cardboard containers and strapping to operators of prizeries for use in moving tobacco from the prizery to the redrying plant are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3903          PACKAGING MATERIALS: WAREHOUSEMEN AND MOVERS

Sales of packaging and packing materials to warehousemen and movers for use in the performance of storage and moving services are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3904          MARKING MACHINES

Sales of marking machines to retailers and wholesalers for use in imprinting price, size, or other information on tickets, tags, etc., are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3905          ICE HANDLING SUPPLIES

Sales of ice picks, ice tongs, tarpaulins and reusable canvas bags to merchants for use in the delivery of ice to customers, but which do not become a part of the sale, are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .3906          EGG CARTONS

Sales of egg cartons to persons engaged in the business of selling eggs are exempt from tax when such cartons become a part of the sale of the eggs to the customer.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .3907          REUSABLE CONTAINERS

(a)  Deposits charged by vendors for reusable containers, other than those described in G.S. 105-164.13(47) and (48) are subject to sales or use tax when the purchasers of the property contained therein can, during the period the containers are in their possession, exercise such control over the containers as is ordinarily associated with ownership.  Such amounts are a part of the sales price even though designated as a deposit for the containers.

(b)  When the vendors retain title to such containers and the vendors retain the right to control the use which vendee makes of the containers, the containers are not considered to be a part of the sale of the property.  In such cases, amounts charged to the customers as security for the return of the containers are not subject to sales or use tax if such charges are shown separately from the sales price of the property on the customers' invoices.  If such amounts are not separately stated, the total charge is subject to the tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105-164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2002; January 1, 1982; July 5, 1980.

 

17 NCAC 07B .3908          FOOD STORAGE SUPPLIES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. July 5, 1980.

 

17 NCAC 07B .3909          DRUMS FOR PACKAGING PRODUCTS

Sales of drums to manufacturers, producers, wholesalers, and retailers are exempt from tax under G.S. 105‑164.13(23) when such drums are used for packaging, shipment, or delivery of tangible personal property which is sold at wholesale or retail and when such drums constitute a part of the sale of such tangible personal property and are delivered with it to the customer.  Sales of paint to manufacturers, producers, wholesalers, and retailers for use in painting such drums are also exempt from tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .3910          RETURNABLE CONTAINERS

When a vendor sells tangible personal property in returnable containers without a charge being made for the use of the containers for a specified time but, at the expiration of the specified time, the containers enter a demurrage period and a penalty charge is made as an inducement for the return of the containers, the charges are incidental to the sale of the property and are not subject to the tax.  If a container is used by the owner of the container or another person to enclose tangible personal property for delivery to a purchaser of the property and is required to be returned to its owner for reuse, it is exempt from tax in accordance with G.S. 105-164.13(23)b.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1998.

 

17 NCAC 07B .3911          Gift Wrapping

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13; 105-262; 105-264;

Eff. January 3, 1984;

Amended Eff. November 1, 1994; October 1, 1993;

Repealed Eff. September 1, 2018.

 

SECTION .4000 ‑ FERTILIZER: SEEDS: FEED AND INSECTICIDES

 

 

17 NCAC 07B .4001          FERTILIZER: LIME AND LAND PLASTER

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .4002          FERTILIZER AND SEEDS

(a)  Sales of seeds to farmers for agricultural purposes are exempt from sales and use tax.  The term "seeds" means seeds in their generally accepted sense and includes flower seed, sets, tubers, roots, tobacco plants, tomato plants, pepper plants, eggplants, potato plants, and other small plants that are raised in beds or hothouses for transplanting.  The term "seeds" does not include potted plants, trees, shrubs, cut flowers, and other larger plants.

(b)  Sales of the following to farmers are exempt from sales and use tax:

(1)           Commercial fertilizer;

(2)           Lime;

(3)           Land plaster;

(4)           Plastic mulch;

(5)           Plant bed covers;

(6)           Potting soil; and

(7)           Baler twine.

(c)  The term "agricultural," as used in this Rule, means cultivating the soil for the production of crops for sale in the regular course of business; the production of animals for sale in the regular course of business; or the holding and management of animals for the production of animal products for sale in the regular course of business.  It includes beekeepers, dairy operators, poultry farmers, egg producers, livestock farmers, nurserymen, greenhouse operators, orchardmen and other persons engaged in the commercial production of plants and animals as described in this Rule for sale in the regular course of business.  It does not include someone who merely cultivates the soil for the ornamental effects nor does it include home gardening or commercial activities other than the types described in this Rule.

 

History Note:        Authority G.S. 105-164.13; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; June 1, 2006; August 1, 2003; August 1, 1996; April 1, 1986; February 1, 1986.

 

17 NCAC 07B .4003          FEED, REMEDIES, VACCINES, MEDICATIONS, AND LITTER MATERIAL FOR ANIMALS

Sales of remedies, vaccines, medications, litter materials, and feed for animals, including cattle, horses, mules, sheep, chickens, turkeys, bees, and fish, held or produced for commercial purposes are exempt from sales or use tax.  The terms "remedies" and "medications" mean all medicines in the generally accepted sense of the term and also include tonics for internal use, vitamins, ointments, liniments, antiseptics, anesthetics, and other medicinal substances having preventive and curative properties in the prevention, treatment, or cure of disease in animals.  The term "feed" includes dietary supplements, such as minerals, oyster shells, salt, bone meal, and other similar preparations or compounds, to be fed directly or to be mixed with feed for animals for normal growth, maintenance, lactation, or reproduction, but does not include sand or grit.  The exemption does not include equipment or devices used to administer, release, or otherwise dispense remedies, vaccines, medications, litter material, or feed.  Retail sales of sand or grit for use in the production of animals are subject to the general rate of state tax and any applicable local sales or use tax.  Retail sales of remedies, vaccines, medications, litter materials, and feed for pets, such as birds, cats, and dogs, are subject to the general rate of state tax and any applicable local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2003; August 1, 1998; October 1, 1993; October 1, 1991; May 1, 1990; May 11, 1979.

 

17 NCAC 07B .4004          INSECTICIDES AND SIMILAR PRODUCTS

(a)  Sales of rodenticides, insecticides, herbicides, fungicides and pesticides, as herein defined, for use in the commercial production of animals or plants are not subject to the sales or use tax.  The exemption for these items does not include equipment or devices used to administer or otherwise dispense the items.  For the purpose of this the following definitions apply:

(1)           Insecticide means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any insects.

(2)           Fungicide means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any fungi or plant disease.

(3)           Herbicide means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any weed.

(4)           Rodenticide means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating rodents.

(5)           Pesticide means any substance used to kill rats, mites, insects, fungi and bacteria.

(b)  Herbicides are exempt only when used as weed killers for the commercial production of plants.  The other items herein defined are exempt only when purchased for the commercial production of plants or to spray, dust, dip, fumigate or otherwise protect animals held or produced for commercial purposes or their quarters against insects, diseases or rodents.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2003; August 1, 1996.

 

17 NCAC 07B .4005          DEFOLIANTS: INHIBITORS: ETC.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .4006          HOUSEHOLD INSECTICIDES: ETC.

Sales of rodenticides, insecticides, herbicides, fungicides and pesticides for household purposes are subject to the applicable statutory state and local sales or use tax.  Sales of insecticides for use on lawns and golf courses are subject to the applicable statutory state and local sales or use tax.  Sales of insecticides and herbicides to contractors for use in performing contracts to clear highway rights‑of‑way are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991; December 1, 1982.

 

17 NCAC 07B .4007          PROCESSED MANURE

Sales of processed poultry manure, cow manure, and other manure to farmers for agricultural use as a fertilizer are not subject to tax.  Occasional or isolated sales by farmers of manure generated in their farming operations are exempt from tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2003; January 1, 1982.

 

17 NCAC 07B .4008          BREAD USED FOR FEED

Bulk sales of bread for use as feed for animals held or produced for commercial purposes are exempt from tax.  Bakeries or stores making such sales shall show on the sales invoices that the bread is being sold as feed and shall reflect the name and address of the purchaser.  If records are not kept supporting sales of this type, such sales will be considered taxable.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996.

 

17 NCAC 07B .4009          RIDING STABLES

A riding stable is considered a commercial enterprise.  Feed for horses owned by or boarded at a riding stable is therefore exempt from sales and use tax.  Charges by riding stables for riding privileges are also exempt from the tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1998.

 

17 NCAC 07B .4010          INSECTICIDES FOR LAWNS

17 NCAC 07B .4011          INSECTICIDES SOLD TO CONTRACTORS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980;

Repealed Eff. December 1, 1982.

 

SECTION .4100 ‑ ARTISTS: ART DEALERS: PHOTOGRAPHERS: ETC.

 

17 NCAC 07B .4101          OBJECTS OF ART

Retail sales of objects of art and art supplies are subject to the applicable statutory state and local sales or use tax except those sales that are exempt under G.S. 105-164.13.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4102          SALES OF PHOTOGRAPHS

The sale of photographs, including all charges for developing or printing, is subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4103          Photo Tinting

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991;

Repealed Eff. September 1, 2018.

 

17 NCAC 07B .4104          BLUEPRINTS

Sales of photostatic copies or blueprints by a photostat or blueprint producer or others to consumers or users are subject to the applicable statutory state and local sales or use tax to be computed on the gross receipts.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4105          PHOTO SUPPLIES AND MATERIALS

Sales of frames, films and other articles by photographers, photo finishers or others to users or consumers are subject to the applicable statutory state and local sales or use tax.  Gross receipts from sales of photographs by commercial or portrait photographers or others are subject to the applicable statutory state and local sales or use tax; however, sales to commercial or portrait photographers of materials which become an ingredient or component part of the finished picture are not subject to the tax.  Mounts, frames, and paper become an ingredient or component part of the finished picture and the sales of such materials to commercial or portrait photographers are not subject to the tax.  Materials such as films, chemicals, proof paper, cameras, trays, and similar items that are used in the manufacture or fabrication of such pictures are exempt from the sales and use tax and subject to the privilege tax under the provisions of G.S. 105-187.51 when such materials are purchased by commercial or portrait photographers.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-187.50; 105-187.51; 105-187.52; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4106          PHOTOENGRAVINGS: ELECTROTYPES: ETC.

Purchases by commercial printers of photoengravings, electrotypes and lithographs, when the same are not for resale, but which the purchaser uses in printing tangible personal property for sale are exempt from the sales and use tax and subject to the privilege tax under the provisions of G.S. 105-187.51.  Sales of photoengravings, electrotypes and lithographs and all other printing equipment and supplies, including paper and ink, to consumer or captive printers are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-187.50; 105-187.51; 105-187.52; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4107          SALES OF MOVIE FILM

The sale of developed movie film to users or consumers is subject to the applicable statutory state and local sales or use tax unless exempt by Statute.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-164.13(5e); 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .4108          NEGATIVE DEVELOPING

Charges by photo finishers for developing customers' film into negatives which are returned to such customers only on the exposed film furnished by the customer to the photo finisher are not subject to sales or use tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 1, 1982; July 5, 1980.

 

17 NCAC 07B .4109          BLUEPRINTS SOLD TO ARCHITECTS

Sales of blueprints, photographs and other tangible personal property to an architectural or engineering firm for use or consumption and not for resale are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4110          BLUEPRINTS SOLD BY ARCHITECTS

Architects are liable for sales tax on blueprints or plans when they reproduce plans or drawings and sell them.  No tax is due when plans and specifications are instruments of service and title thereto remains with the architects.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

SECTION .4200 ‑ SALES TO THE UNITED STATES GOVERNMENT OR AGENCIES THEREOF

 

 

17 NCAC 07B .4201          IN GENERAL

(a)  Sales made directly to the United States Government, or any agency thereof, are not subject to the sales or use tax.  In order to be a sale to the United States Government, the government or agency involved must make the purchase of the property, obtain title to the property before or at the time it is delivered, and pay directly to the vendor the purchase price of such property or use a government bankcard to pay the vendor the purchase price of such property.

(b)  Nontaxable federal agencies include the United States Postal Service, Departments of Defense, Army, Navy and Air Force, United States hospitals, federal reserve banks, federal land banks, federal housing projects, federal housing authorities, or any other department or departments of the federal government whose activities are directly under federal control and whose purchases are paid for from the federal treasury.

(c)  Sales made to Army, Navy and Air Force Activities Funds, post exchanges, officers' mess funds, noncommissioned officers funds and other voluntary unincorporated organizations of Army, Navy, Marine Corps, Air Force, or Coast Guard personnel authorized by regulations issued by the Departments of Defense, Army, Navy or Air Force are likewise exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1988.

 

17 NCAC 07B .4202          EXEMPT SALES TO THE UNITED STATES GOVERNMENT

(a)  Purchase Requisitions: A vendor making sales directly to the United States Government, or any agency or instrumentality thereof, that issues purchase requisitions or affidavits must obtain and keep copies of such purchase requisitions or affidavits signed by the purchasing officer stating that such sales are being made directly to the United States Government or an agency or instrumentality thereof.  Copies of such purchase requisitions or affidavits must be retained by the vendor in his files for three years following the date of sale and must be available for inspection by the Secretary of Revenue or her agents upon request.

(b)  United States Government Credit Card Program – GSA Smartpay:  Card designs may be viewed on the following Internet website:  http://www.gsa-smartpay.org/gsa-howidentify.html.

(1)           Fleet Cards:  All Federal Government fleet cards are centrally billed.  This means that all charges are billed directly to and paid directly by the Federal Government and are exempt from the general rate of State tax and any applicable local sales and use tax. 

(2)           Purchase Cards:  All Federal Government purchase cards are centrally billed.  This means that all charges are billed directly to and paid directly by the Federal Government and are exempt from the general rate of State tax and any applicable local sales and use tax. 

(3)           Travel Cards:  Federal Government travel cards may be centrally billed or individually billed.  Individually billed charges are billed to and paid by the Federal employee who is then reimbursed by the Federal Government.  These charges are subject to the general rate of State tax and any applicable local sales and use tax.  Centrally billed charges are billed directly to and paid directly by the Federal Government and are exempt from to the general rate of State tax and any applicable local sales and use tax.

(4)           Integrated Cards:  Federal Government integrated cards include fleet, travel, purchase transactions or any combination thereof and offer the Federal Government a single card for all of its purchases.  This card is in use only at the Department of the Interior.  All fleet and purchase type transactions on an integrated card are centrally billed, and travel type transactions may be centrally billed or individually billed. Centrally billed charges are billed directly to and paid directly by the Federal Government and are exempt from the general rate of State tax and any applicable local sales and use tax.  Individually billed charges are billed to and paid by the Federal employee and then reimbursed by the Federal Government.  These charges are subject to the general rate of State tax and any applicable local sales and use tax. 

 

History Note:        Authority G.S. 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; April 1, 1997; January 1, 1995; October 1, 1993; October 1, 1991; August 1, 1988.

 

17 NCAC 07B .4203          CONTRACTORS FOR THE FEDERAL GOVERNMENT

Sales of tangible personal property to contractors for use in performing contracts with the United States Government or its agencies and instrumentalities are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4204          GOVERNMENT AGRICULTURAL OFFICES

County agricultural stabilization and conservation offices are agencies or instrumentalities of the federal government and are exempt from payment of sales and use taxes on their purchases of tangible personal property for use in carrying on their work.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4205          FEDERAL CREDIT UNIONS AND THE FARM CREDIT SYSTEM

(a)  Federal Credit Unions: Sales of tangible personal property to federal credit unions organized under the Federal Credit Union Act, 12 U.S.C. §§ 1751 et seq., are exempt from North Carolina sales and use tax.  See 12 U.S.C. § 1768.

(b)  The Farm Credit System: The Farm Credit System, 12 U.S.C  §§ 2001 et seq., includes the Farm Credit Banks, the Federal land bank associations, the production credit associations, the banks for cooperatives, and such other institutions as may be made part of the System, all of which are chartered by and subject to the regulation of the Farm Credit Administration.

(1)           Sales of tangible personal property to Farm Credit Banks and Federal land banks are exempt from North Carolina sales and use tax.  See 12 U.S.C. §§ 2023 and 2098.

(2)           Sales of tangible personal property to production credit associations and banks for cooperatives for use or consumption are subject to the applicable statutory state and local sales or use tax.  See 12 U.S.C. §§ 2077 and 2134.

 

History Note:        Authority G.S. 105‑164.13; 105-262; 105‑264; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; November 1, 1995; January 1, 1995; January 3, 1984.

 

17 NCAC 07B .4206          FED SAVINGS/LOAN ASSOC, NATL BANKS/ST BANKS/ST CHARTERED CREDIT UNIONS

(a)  Sales of tangible personal property to federal savings and loan associations and national banks for use or consumption are subject to the applicable statutory state and local sales or use tax.  See 12 U.S.C. § 1464(h) and 548.

(b)  Sales of tangible personal property to state banks and state chartered credit unions for use or consumption are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-262; 105‑264; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; January 1, 1995; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4207          RESERVE OFFICERS' UNIFORMS

Sales of uniforms, other than sales directly to the United States Government, for use in reserve officers training programs are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4208          POSTAL EMPLOYEES' ASSOCIATIONS

A post office employees' association is not construed to be an instrumentality of the United States and sales by such organizations are subject to tax.  Neither the situs of the sale nor the status of the vendor would make them exempt from the North Carolina sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980.

 

17 NCAC 07B .4209          BUSINESSES IN FEDERAL AREAS

The fact that a business is located in a federal area does not in itself exempt said business from collecting and remitting sales tax.  Title 4 of the U.S. Code, Section 105, provides that a state which levies sales taxes shall have full jurisdiction and the power to levy and collect sales taxes in any federal area within such state to the same extent and with the same effect as though such area was not a federal area with certain exemptions provided in Title 4, U.S. Code, Section 107, for sales by the United States Government or its instrumentalities.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4210          CHEROKEE INDIAN RESERVATION

Sales of tangible personal property by merchants on the Cherokee Indian Reservation are exempt from sales and use taxes when such merchants are authorized to do business on the Reservation and are paying the tribal gross receipts levy to the Tribal Council.  The above exemption from the tax is applicable to all sales by merchants on the Reservation without regard to the status of the purchaser.

Sales of tangible personal property by in‑state vendors or out‑of‑state vendors to the Eastern Band of Cherokee Indians or to individual Indians of the band are exempt from sales and use taxes when delivery of the property occurs on the Reservation.  Sales of tangible personal property by in‑state or out‑of‑state vendors to the Eastern Band of Cherokee Indians, to individual Indians of the band, to contractors or anyone else representing Indians are subject to sales or use taxes when delivery thereof occurs outside the Reservation even though such property may be incorporated into improvements on the Reservation.

Contractors are users or consumers of all tangible personal property which they purchase within or without this State for use in the performance of contracts.  Contractors are liable for remitting the applicable sales or use tax on all tangible personal property purchased within or without this State when delivery occurs off the Reservation even though the contractors may use it or incorporate it in improvements on the Reservation.  Property purchased by and delivered to a contractor on a Reservation to be incorporated in an improvement to real property is not subject to sales or use tax.  Property purchased by and delivered to contractors on a reservation for use in performing a contract (but where the property is not incorporated in an improvement) is subject to sales or use tax unless sold by merchants on the Cherokee Indian Reservation who are authorized to do business there and who pay the tribal levy on the transaction which property is, therefore, exempt under G.S. 105‑164.13(25).

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 1, 1982.

 

section .4300 – refunds to interstate carriers

 

17 NCAC 07B .4301          REFUNDS TO INTERSTATE CARRIERS

(a)  Scope -- This Rule explains the sales and use tax refund allowed to interstate carriers under G.S. 105-164.14(a) The refund authorized by that statute does not apply to taxes listed in 17 NCAC 07B .1602(d).

(b)  Eligible Items – Sales and use taxes paid on railway cars and locomotives are eligible for refund.  In addition, the following items are considered to be fuel, a lubricant, a repair part, or an accessory.  Therefore, sales and use taxes paid on purchases of the following items are eligible for refund under G.S. 105-164.14(a):

(1)           antennas;

(2)           antifreeze;

(3)           bedding for motor vehicle sleeping compartments;

(4)           charts for tachographs;

(5)           decals for motor vehicles;

(6)           emergency flares and reflectors;

(7)           fire extinguishers;

(8)           freon or nitrogen used in refrigerating and cooling motor vehicles;

(9)           furniture pads;

(10)         lifeboats and oxygen masks;

(11)         load jacks and chains;

(12)         mobile CB radios;

(13)         motor vehicle seat cushions;

(14)         paints for decals;

(15)         polyethylene liners (used to waterproof trailers);

(16)         pouches for registration cards and permits;

(17)         radios;

(18)         ramp equipment (aircraft steps used to embark or disembark aircraft);

(19)         ropes and chains to tie down cargo (adapted for use on motor vehicles; otherwise not allowed);

(20)         signs (metal signs attached to trucks);

(21)         tarpaulins;

(22)         tire chains;

(23)         tire and tubes;

(24)         welding rods for repair of motor vehicles;

(25)         windshield solvents; or

(26)         zipped covers for grills.

(c)  Items not Eligible -- The following items are not considered to be fuel, a lubricant, a repair part, or an accessory.  Therefore, sales and use taxes paid on purchases of the following items are not eligible for refund under G.S. 105-164.14(a):

(1)           drivers' gloves;

(2)           drivers' uniforms;

(3)           food trays (airplanes); 

(4)           fork lift tires and parts;

(5)           gauges for testing equipment;

(6)           hand trucks;

(7)           license and inspection fees;

(8)           pallets;

(9)           pillows (airplanes);

(10)         repair labor;

(11)         road service charges;

(12)         security seals;

(13)         sixty percent on recapped tires where forty percent of the combined price is taxed (17 NCAC 07B .1901);

(14)         tire volume discounts;

(15)         tools, shop supplies;

(16)         trip logs; or

(17)         wax and washing supplies.

(d)  Other Items -- The lists in this Rule do not include every item that is or is not subject to refund.  Upon request, the Sales and Use Tax Division shall determine if an item not included in either list is subject to refund.

(e)  Amount of Refund -- G.S. 105-164.14(a) sets out the formula for computing the amount of a refund.  Under the formula, an interstate carrier receives a refund for a percentage of the tax paid on eligible items.

 

History Note:        Authority G.S. 105‑164.14; 105‑262;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; July 1, 2000; August 1, 1998; August 1, 1996; October 1, 1993; July 1, 1990; February 1, 1987; March 1, 1984.

 

17 NCAC 07B .4302          REFUNDS TO RAILROAD COMPANIES

The repair of cars of a foreign line operated by an applicant shall be included in total purchases by the applicant for refund regardless of the fact that the operating company may bill the owner for repairs performed on such cars.  Repairs to the applicant's cars operating on foreign lines shall be excluded since such cars are not being operated by the applicant for refund, regardless of the fact that the foreign company may bill the applicant for repair parts used to maintain the applicant's cars when in operation over foreign lines.  Because there is no record kept of the miles that the applicant's railroad cars may travel over foreign lines, the applicant for refund shall exclude lubricants, repair parts and accessories for which the applicant is billed by the operating company when its cars are traveling over foreign lines; however, the car miles that foreign cars travel over the lines of the applicant for refund shall be taken into consideration in establishing the number of miles of operation in this state and the total number of miles of operation within and without this state for the calendar quarter.  Locomotives are not ordinarily interchanged in the same manner as railroad cars; however, if locomotives are operated in the same manner as railroad cars, the provisions of this Rule will also be applicable to the operation of locomotives.

 

History Note:        Authority G.S. 105‑164.14; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993.

 

17 NCAC 07B .4303          APPLICATION

An interstate carrier must file Form E-581 to obtain a refund under G.S. 105-164.14(a).  A refund period is a calendar quarter.  A claim for refund covers sales and use taxes paid during a quarter.  A claim for refund is due within 60 days after the end of a quarter.  The Department shall not accept a claim for refund filed later than three years after its due date.  A claim for refund shall include only taxes paid for the calendar quarter covered by the claim.  An amended claim for refund shall be filed to correct an understatement of a refund claimed for a prior quarter.  An amended claim for refund must be filed to correct an overstatement of a refund made for a prior quarter.

 

History Note:        Authority G.S. 105‑164.14; 105‑262;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; July 1, 2000; October 1, 1993; November 3, 1978.

 

SECTION .4400 ‑ LEASE OR RENTAL

 

 

17 NCAC 07B .4401          LEASE RECEIPTS

The gross receipts or gross proceeds derived from or the total amount agreed to be paid for the lease or rental, within North Carolina, of all kinds and types of tangible personal property not specifically exempt by statute are subject to the sales or use tax at the same rate which is applicable to the retail sale of such property.  The tax shall be computed and paid on such gross receipts, gross proceeds, or rental payable without any deduction whatsoever for any expense incident to the conduct of business.  The tax is due and payable at the time the lessor bills the lessee for the rent whether such billing is for the lump sum rental or on a monthly or other periodic basis.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4402          ROYALTIES

Royalties paid, or agreed to be paid, either on a lump sum or production basis, for tangible personal property used in this state are rentals subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4403          MAINTENANCE OF LEASED PROPERTY

(a)  Sales of tangible personal property to registered lessors or retailers for the purpose of lease or rental exclusively are wholesale sales and not subject to tax provided completed and executed certificates of resale are furnished to the vendors of such property.  Sales of lubricants, repair parts and accessories to such lessors or retailers who use them to repair, recondition or maintain such leased or rented personal property are also wholesale sales when completed and executed certificates of resale are provided to vendors of this type property.  Lessors are responsible for payment of any applicable statutory state and local tax on the cost price of such items if they are used for a purpose other than repairing or maintaining leased or rented property or if they are resold as such.  Any tax due thereon is to be paid to the Secretary of Revenue on the lessors' or retailers' sales and use tax returns.

(b)  When the lessee purchases lubricants and repair parts to maintain tangible personal property being leased or rented, the lessee is liable for payment of the applicable statutory state and local sales or use tax on the cost price of such purchases to the vendors or to the Secretary of Revenue.  If a separate maintenance agreement for a fixed fee where no separate charge is made for parts and labor is executed by the lessor and lessee whereby the lessor or the lessee agrees, for a consideration separate from the lease payments, to maintain property being leased or rented, purchases of repair parts and lubricants by either party are subject to the tax payable by the purchaser thereof as described in this Rule.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; June 1, 1992; October 1, 1991; March 1, 1984.

 

17 NCAC 07B .4404          EQUIPMENT FURNISHED WITH OPERATOR

If the owner of tangible personal property furnishes an operator or crew to operate such property, such owner is not deemed to be renting or leasing the property but is rendering a service and the receipts therefrom are not subject to the sales or use tax.  Persons purchasing repair parts, lubricants and other tangible personal property for use in rendering such service are liable for payment of sales or use tax at the applicable rate on the purchase price.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4405          LEASE WITH OPTION TO PURCHASE

Sales or use tax is due on the gross receipts derived from or the total amount agreed to be paid for the lease or rental of tangible personal property under a lease agreement with an option to purchase.  If the agreement provides that the lessee will pay a stipulated amount at the time the option is exercised less a credit for a portion or all of the lease payments, the tax is due on the amount actually paid.  For example, when the option is exercised, if the purchase price of the tangible personal property is seven hundred dollars ($700.00) and the credit allowed for lease payments under the agreement is two hundred dollars ($200.00) on which the tax has been paid, additional tax is due on the five hundred dollars ($500.00) at the time the option is exercised.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4406          INSURANCE ON LEASED PROPERTY

The gross proceeds derived from or amounts agreed to be paid for the lease or rental of all kinds and types of tangible personal property for storage, use or consumption within this state are subject to the applicable statutory state and local sales or use taxes.  The tax shall be computed on the gross receipts, gross proceeds or rental payable without any deduction whatsoever for any insurance charges paid to insure the property of the lessor or to insure the lessor against liability for damages to the property or person of others.  When the lessee purchases insurance on his own property or to insure himself against liability for damages to the property or person of others, insurance premiums paid by such lessee directly to the insurer or to the lessor as agent for transmittal to the insurer are exempt from tax.  If the lessee pays such insurance premiums directly to the lessor as agent for transmittal to the insurer, such amounts are exempt from tax provided they are separately stated from the charges for the lease or rental of tangible personal property in the lessor's records and on the invoice given to the lessee; otherwise, the total amount charged by the lessor is subject to the tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .4407          leases for out of state use

 

History Note:        Authority G.S. 105-164.4; 105-262;

Eff. February 1, 1976;

Amended Eff.  October 1, 1993; July 5, 1980;

Repealed Eff. April 1, 2016.

 

17 NCAC 07B .4408          LEASES: OUT OF STATE NEGOTIATIONS

Lessors of motor vehicles may elect to pay the highway use tax to the Commissioner of Motor Vehicles when applying for a certificate of title for a motor vehicle purchased for lease or rental or they may collect and remit to the Secretary of Revenue the alternate gross receipts tax on the lease or rental receipts derived therefrom.  G.S. 105-187.1 through G.S. 105-187.11 contains the provisions of the highway use tax and alternate gross receipts tax rates on motor vehicles.  To make the election to collect and remit the tax on rental receipts, the lessor shall complete a Form MVR 608 provided by the Division of Motor Vehicles at the time of applying for a certificate of title.  Once made, an election is irrevocable for that motor vehicle.  If North Carolina Lessors lease motor vehicles to out‑of‑state lessees to be located, domiciled or assigned in this state for use in interstate operations, the lessors shall remit the highway use tax to the Commissioner of Motor Vehicles when applying for a certificate of title for the vehicles or collect and remit the alternate gross receipts tax on the lease or rental receipts notwithstanding that the lease may be negotiated outside North Carolina or that the vehicles are delivered to the lessees at a point outside this state or are registered outside this state.  If North Carolina lessors lease motor vehicles to out‑of‑state lessees for use exclusively in a state other than North Carolina and deliver the vehicles to the lessees at a point outside this state, the lessor is not liable for the highway use tax on the vehicle or the alternate gross receipts tax on the lease receipts.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105-187.5; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 1996; May 1, 1994; October 1, 1993; July 5, 1980.

 

17 NCAC 07B .4409          LEASED PROPERTY: MAINTENANCE

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .4410          ASSIGNMENT OF LEASE

(a)  Assignment of a Lease Contract and Creation of a Security Interest in the Leased Property.  Where upon a recourse basis a lessor assigns a lease contract and gives a security interest in the leased property which is designated as such but retains title to such property, the lessor remains liable for collecting and remitting tax on the lease receipts notwithstanding that the lessor does not receive rental payments directly from the lessee.  However, if the assignee enforces the security agreement and acquires title to the leased property, he becomes the lessor of such property and liable for collecting and remitting tax on the receipts from its lease or rental.

(b)  Assignment of a Lease Contract Together With its Right, Title and Interest in the Leased Property For Security Purposes.  Where for security purposes and upon a recourse basis, a lessor assigns a lease contract together with its right, title and interest in the leased property, but the property will revert to the lessor at the expiration of the lease, the lessor remains liable for the collecting and remitting tax on the lease receipts notwithstanding that the lessor does not receive rental payments directly from the lessee.

(c)  Assignment of a Lease Contract and All Right, Title and Interest in the Leased Property.  When a lessor assigns a lease contract together with all right, title and interest in the leased property, the assignment is not for security purposes and the assignor does not retain any ownership rights in the contract or the property.  The assignee has no recourse against the assignor.  The assignee must be registered for sales and use tax purposes with this state and is liable to collect and remit the tax on the remaining lease receipts.  The assignor shall obtain a valid certificate of resale from the assignee bearing the assignee's North Carolina sales and use tax registration number.

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; February 1, 1987.

 

17 NCAC 07B .4411          EXTENSION OF LEASES

When tangible personal property, the sale of which is subject to a maximum tax, is leased for a definite stipulated period of time, the lease payments during the lease period are subject to the maximum tax.  If the original lease contains provisions for extension either by notification or by failure to notify the lessor of termination, the extended term of the lease is part of the original lease and the maximum tax would apply to the entire lease including any extension under the terms of the original lease.  If, however, the original lease does not contain provisions for extension at the option of the lessee, whether by action or nonaction, but a new lease agreement is subsequently entered into granting an extension or a new lease, there would be a second lease which would not have the benefit of sales tax payments made by reason of the first lease with respect to the maximum tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4412          SALE OF LEASED PROPERTY

When tangible personal property which has been leased is sold at retail, the sale is subject to the applicable retail rate of tax without regard to any tax which has been collected and remitted to the Department on receipts from the lease or rental of the property.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4413          CONDITIONAL SALES CONTRACT

A conditional sales contract is an agreement that requires the following:

(1)           The transfer of title under a security agreement or deferred payment plan upon completion of the required payments; or

(2)           The transfer of title upon completion of required payments and payment of an option price that does not exceed one hundred dollars ($100.00) or one percent of the total required payments.

Any applicable statutory state and local sales and use tax for a conditional sales contract is due upon delivery of the tangible personal property to the purchaser.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993.

 

17 NCAC 07B .4414          GOLF DRIVING RANGE FEES

Charges by golf driving ranges for the use of the range are not subject to sales or use taxes.  In such cases, the person who pays the charge is generally entitled to the use of a golf club, basket of balls and the driving range; thus, there is no sale or rental of tangible personal property.  Sales or rentals of tangible personal property by such businesses are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4415          SKATING RINK FEES

Charges for the use of a skating rink or bowling alley are not subject to sales or use taxes; however, if such businesses rent tangible personal property, such as skates and shoes, charges for same are subject to sales tax.  Sales of tangible personal property by such businesses are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4416          HIGHWAY USE TAX AND ALTERNATE GROSS RECEIPTS TAX

 

History Note:        Authority G.S. 105‑187.3; 105‑187.4; 105‑187.5; 105‑187.6; 105‑187.8; 105‑187.9; 105‑187.11;

105‑262;

Eff. October 1, 1991;

Amended Eff. June 1, 1992;

Repealed Eff. October 1, 1993.

 

section .4500 - LAUNDRIES: DRY CLEANING PLANTS: LAUNDERETTES: LINEN RENTALS: AND SOLICITORS FOR SUCH BUSINESSES

 

17 NCAC 07B .4501          SALES BY LAUNDRIES: ECT.

 

History Note:        Authority G.S. 105-164.4; 105-262;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; April 1, 1997; October 1, 1993; June 1, 1992; October 1, 1991;

August 1, 1988;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .4502          FUEL FOR LAUNDRIES: ETC.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; February 1, 1986; May 1, 1985;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .4503          EQUIPMENT AND SUPPLIES FOR LAUNDRIES: ETC.

(a)  Sales to laundries, dry cleaning plants and similar businesses of machinery used in the direct performance of the laundering or the pressing and cleaning service and parts and accessories thereto are exempt from sales and use tax.  The following items are exempt when sold to the herein-named businesses:

(1)           washing machines, water heaters, water softener tanks, central control collection systems, pressing machines, marking machines, packaging machines, folding machines and similar cleaning machines;

(2)           hydraulic fluids used in laundry and dry cleaning machinery;

(3)           boiler compounds used in boilers furnishing water or steam to the laundering, pressing or cleaning machinery;

(4)           steam hose leading directly from the boiler to the laundering and dry cleaning machinery;

(5)           press pads and covers for laundering and dry cleaning machinery;

(6)           baskets, hampers, casters, or other containers used between the laundering and cleaning processes to transport or contain garments being laundered or cleaned;

(7)           carbon and carbon filters used for reprocessing cleaning compounds;

(8)           lint rolls and refills therefore;

(9)           conveyors used to transport garments along the laundering, cleaning, and pressing line during the process but not conveyors used before the laundering, cleaning, and pressing process begins or after it has been completed;

(10)         boiler room machinery, including valves, fittings and water pumps; and

(11)         transformers located on or adjacent to motors which power machinery used in the direct performance of laundering and cleaning services.

(b)  The following items are not classified as laundering, pressing or dry cleaning machinery or parts and accessories thereto and are, therefore, subject to the applicable statutory state and local sales or use tax when sold to the herein-named businesses:

(1)           coin operated musical devices, amusement devices, coin changers, vending machines and repair or replacement parts for such machines;

(2)           baskets, hampers, casters, or containers used for general purposes such as to pick up soiled garments or deliver clean garments;

(3)           smoke stacks, including the steel ladders attached thereto;

(4)           wiring used in the general wiring system and the transformers used in connection therewith;

(5)           sewing machines used in repairing or altering the customers' property and the replacement or repair parts to such machines;

(6)           tailoring supplies such as buttons, threads and zippers for use in repairing or altering garments for which no charge is made to the customer;

(7)           letterheads, monthly reports, envelopes and other office supplies;

(8)           protective clothing for employees such as rubber gloves, aprons, protective shoes, etc. whether paid for by the employer or the employee;

(9)           steam hose or pipe used in the general heating system;

(10)         janitorial supplies;

(11)         office furniture, fixtures and equipment, including cash registers;

(12)         uniforms for employees;

(13)         advertising materials;

(14)         structural or building materials, supplies, fixtures and equipment which shall become a part of or be annexed to any building or structure being erected, altered or repaired;

(15)         equipment used in the storage process to revitalize furs;

(16)         conveyors used before or after the laundering, pressing and cleaning process to transport garments but not those used to move the garments along the laundering, pressing and cleaning line;

(17)         lubricants used in laundering, pressing, or cleaning machines.

(18)         transformers used in connection with general wiring and power supply; and

(19)         water softener chemicals.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993; October 1, 1991; January 1, 1982.

 

17 NCAC 07B .4504          LAUNDRY SUPPLIES

Mesh bags and tickets which accompany the garment through the laundering and cleaning process for identification purposes are exempt from sales and use tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993.

 

17 NCAC 07B .4505          MISCELLANEOUS LAUNDRY EQUIPMENT

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .4506          GARMENT REPAIRS AND STORAGE

17 NCAC 07B .4507          rug reinstallation charges

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991; 

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .4508          LAUNDRY BUSINESS: INTERSTATE

When a North Carolina dry cleaning firm performs cleaning services within this state, the place where the garments are delivered is the determining factor in sourcing the sale for sales and use tax purposes.  If the solicitor delivers the garments in North Carolina, the applicable statutory state and local sales or use tax is due.  If the garments are delivered outside North Carolina, this state's tax is not due notwithstanding whether the service is performed in this State.  When a nonresident cleaning plant sends an employee into this state to pick up garments which are cleaned at the plant's location in another state and delivered to the customer in this state, the charge to the North Carolina customer is subject to the applicable statutory state and local sales and use tax.  When a nonresident solicitor comes into this state to solicit cleaning business on his own behalf which he will have cleaned by a nonresident cleaning plant, the solicitor is liable for collecting and remitting the tax on the gross receipts derived from soliciting such business in this state.

 

History Note:        Authority G.S. 105-164.4; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993.

 

17 NCAC 07B .4509          UNIFORM RENTALS

Uniform rental businesses are not soliciting laundry or cleaning but are soliciting rental business for themselves.  The total charge to such businesses by commercial laundries and dry cleaners for laundering or dry cleaning articles of tangible personal property which are to be leased or rented are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4510          INDEPENDENT CLEANING SOLICITORS

An independent operator that owns his truck and solicits business but engages a laundry, dry cleaning, or hat blocking firm or similar type business to perform the laundering, cleaning, or other service is liable for collecting and remitting the applicable statutory state and local sales or use tax on his gross receipts.  If the solicitor is not registered with the Department of Revenue for remitting the tax on his gross receipts, the firm performing the laundering, cleaning or similar type services shall collect and remit the tax on the total charge for the services performed for the independent operator without any deduction of any allowance to the solicitor.  The firm performing the service shall secure from the solicitor a Streamlined Sales and Use Tax Agreement Certificate of Exemption, Form E-595E, which shall be accepted as evidence that the solicitor is registered for payment of the tax and as authority for not charging tax on the gross receipts from the service performed for the solicitor.

 

History Note:        Authority G.S. 105-164.4; 105-164.5; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993.

 

17 NCAC 07B .4511          DYEING OF GARMENTS

When North Carolina laundries or dry cleaning plants accept dyeing jobs which they ship to out‑of‑state dyers for dyeing, the North Carolina laundries or dry cleaning plants are liable for collecting and remitting the applicable statutory state and local sales or use tax on the charges to their customers for the dyeing work.

 

History Note:        Authority G.S. 105‑164.4; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993.

 

17 NCAC 07B .4512          EXCLUSION OF TAX FROM RECEIPTS

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 5, 1980;

Repealed Eff. August 1, 1988.

 

17 NCAC 07B .4513          INDUCEMENTS TO CLEANING SERVICES

When silver dollars are given to customers by dry cleaning establishments or other vendors as an inducement to business, the tax is due on the total amount charged to the customer for the cleaning service or tangible personal property without regard to credit for the amount of the inducement.

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4514          CLEANING MACHINERY REPAIRS

Sales of welding rods to commercial laundries and dry cleaning operators for use in repairing machinery used directly in the laundering or dry cleaning service are exempt from sales and use tax.  Sales of oxygen and acetylene to such operators for use in repairing machinery are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. August 1, 2009; October 1, 1993.

 

17 NCAC 07B .4515          FUEL FOR CLEANING PLANTS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. February 1, 1986; May 1, 1985;

Repealed Eff. April 1, 1986.

 

SECTION .4600 ‑ MOTOR VEHICLES AND BOATS

 

 

17 NCAC 07B .4601          SALES AND PURCHASES OF AUTOMOBILES AND OTHER MOTOR VEHICLES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.6; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; July 1, 1990; February 1, 1988; March 1, 1987;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .4602          BOATS, BOAT TRAILERS, AND ACCESSORIES

A retail sale of a boat with a boat trailer is considered to be the sale of two separate articles.  The retail sale of the boat trailer, a motor vehicle within the meaning of the statute, is subject to the three percent highway use tax.  The retail sale of the boat is subject to the three percent rate of tax with a maximum tax of one thousand five hundred dollars ($1,500.00) applicable to the sale of any boat except for those sales exempt from tax under the provisions of G.S. 105‑164.13(9).  The tax shall be computed on the gross sales price of the boat, including charges for the boat motor, fenders, boat and motor controls, compasses, windshields, horns, lights, or any other parts or accessories, all of which must be attached thereto at the time of delivery to the purchaser, labor for installing such parts and accessories, freight or any other charge for preparing the boat for sale.  Life jackets, life rings, cushions, flares, fire extinguishers and rope are considered to be safety equipment rather than accessories to the boat and sales of such items at retail are subject to the general State tax and any applicable local sales or use tax notwithstanding they are sold with the boat.  Parts and accessories, including boat motors, fenders, boat and motor controls, lights, windshields, horns and other above‑named items sold separately from the sale of a boat are also subject to the general State tax and any applicable local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. August 1, 2002; October 1, 1993; October 1, 1991; July 1, 1990; January 3, 1984.

 

17 NCAC 07B .4603          MOTOR VEHICLE SERVICE BUSINESSES

17 NCAC 07B .4604          special equipment-accessories: motor vehicles

 

History Note:        Authority G.S. 105-164.3; 105-164.4; 105-164.5; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; June 1, 1992; October 1, 1991; July 1, 1990;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .4605          MOTOR VEHICLES TRADED IN

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. February 8, 1981;

Repealed Eff. January 1, 1982.

 

17 NCAC 07B .4606          MOTOR VEHICLES USED BY DEALERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 1990; March 1, 1984;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .4607          MOTOR VEHICLE KITS

17 NCAC 07B .4608          MOTOR VEHICLES: MILITARY PERSONNEL

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 3, 1984; July 5, 1980;

Repealed Eff. October 1, 1990.

 

17 NCAC 07B .4609          FIRE TRUCKS AND EQUIPMENT

Retail sales of axes, brooms, buckets, shovels, ropes, general purpose tools, gas masks, first aid kits, blankets, portable pumps, portable fire extinguishers and like articles are considered to be other fire fighting equipment rather than accessories to the fire truck, and sales of such items at retail are subject to the applicable statutory state and local sales or use tax without any maximum tax applicable thereto notwithstanding such sales are made to the above type customers or that the items are sold with fire trucks.  Privately owned fire trucks or vehicles on which fire fighting equipment has been mounted that are used only for fire fighting purposes are classified as special mobile equipment, and sales thereof are subject to the applicable statutory state and local sales or use tax.  Sales of repair parts to municipalities, counties, rural fire protection districts, and industrial users for use in repairing fire trucks are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991; July 1, 1990; January 3, 1984.

 

17 NCAC 07B .4610          MOTOR VEHICLES: SALES BY FEDERAL GOVERNMENT

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. July 1, 1990.

 

17 NCAC 07B .4611          PARTS FROM JUNKED MOTOR VEHICLES

Persons, firms, or corporations engaged in the business of making retail sales of used parts from junked motor vehicles are liable for collecting and remitting the applicable rate of tax on such sales.  When traded‑in or repossessed articles are dismantled and the parts therefrom are sold at retail by such businesses, the parts lose their identity as traded‑in or repossessed articles and are subject to the tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; March 1, 1993; July 5, 1980.

 

17 NCAC 07B .4612          MOTOR VEHICLE SELLING EXPENSES

17 NCAC 07B .4613          MOTOR VEHICLE LESSORS

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1990; July 1, 1990;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .4614          PICKUP CAMPERS: TRAILERS

Retail sales of camper trailers which are designed to run on the streets and highways and which are pulled by a self‑propelled vehicle are classified as sales of motor vehicles and exempt from sales tax.  Retail sales of such camper trailers are subject to the highway use tax.  Retail sales of slide‑in pickup camper units are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991; October 1, 1990; July 1, 1990.

 

17 NCAC 07B .4615          MANUFACTURED HOMES

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. September 1, 2006; October 1, 1993; October 1, 1991; July 1, 1990; January 3, 1984;

Repealed Eff. March 1, 2016.

 

17 NCAC 07B .4616          DOUBLE‑WIDE MOBILE HOMES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. January 3, 1984; July 5, 1980; March 24, 1978;

Repealed Eff. July 1, 1990.

 

17 NCAC 07B .4617          MOBILE CLASSROOM, OFFICE AND STORAGE TRAILERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 1990; January 3, 1984; July 5, 1980; March 24, 1978;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .4618          MOTOR VEHICLE SUPPLIES

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1991;

Repealed Eff. June 1, 1992.

 

17 NCAC 07B .4619          HIGHWAY USE TAX

 

History Note:        Authority G.S. 105‑187.3; 105‑187.4; 105‑187.5; 105‑187.6; 105‑187.8;

105‑187.9; 105‑262;

Eff. October 1, 1990;

Amended Eff. June 1, 1992; October 1, 1991;

Repealed Eff. October 1, 1993.

 

SECTION .4700 ‑ PRINTERS AND NEWSPAPER OR MAGAZINE PUBLISHERS

 

17 NCAC 07B .4701          COMMERCIAL PRINTERS AND PUBLISHERS

(a)  All retail sales of tangible personal property by commercial printers or publishers are subject to the applicable statutory state and local sales or use tax unless the sales are subject to a lesser rate of tax under the provisions of G.S. 105‑164.4(a) or are exempt under the provisions of G.S. 105‑164.13.  The following transactions are also exempt from sales or use tax:

(1)           charges for advertising space in newspapers, magazines and other publications;

(2)           charges made by printers for imprinting or binding books or forms or other similar items which are owned by their customers;

(3)           Printed material which is sold by a retailer to a purchaser within or without this state when the printed material is delivered by the printer directly to a mailing house or to a common carrier or to the United States Postal Service for delivery to a mailing house in this state which will preaddress and presort the material and deliver it to a common carrier or to the United States Postal Service for delivery to recipients outside this state designated by the purchaser.

(A)          Sales of printed material by a retailer located within or without this state which is delivered directly to the purchaser in this state for the original purpose of preparing and delivering the printed material to the United States Postal Service or a common carrier for delivery to prospective customers or other recipients outside this state are exempt from sales and use tax provided the purpose is consummated.  A purchaser of the printed material for preparation and delivery to prospective customers and other recipients outside this state must furnish the vendor a written statement certifying that the printed material is being purchased for use in a mailing program which is in place at the time of purchase; otherwise, the vendor must collect and remit the tax on the sales.  Sales of printed materials to a user or consumer in this state to be placed in the purchaser's inventory for use as needed are subject to sales or use taxes notwithstanding that all or a portion of the printed material may be delivered to the United States Postal Service or a common carrier for delivery to prospective customers or other recipients outside this state.

(B)          A retailer who sells printed material delivered to a common carrier or the United States Postal Service for delivery to the purchaser at a point within this state who prepares the material to be mailed to prospective customers or other recipients without charge and transports the material outside this state to be delivered to the United States Postal Service or a common carrier or to a mailing house outside this state for delivery to designated recipients is liable for sales or use tax except as provided in this Rule.

(b)  Retail sales of advertising circulars, catalogues, booklets, pamphlets, forms, tickets, letterheads, envelopes and similar items and retail sales of books, magazines, periodicals, newspapers and other publications are subject to the applicable statutory state and local sales or use tax unless the sales are exempt from tax under the provisions of G.S. 105‑164.13.  When publications, other than magazines, are sold by subscription, the tax accrues at the time the subscription is accepted.

(c)  Sales to commercial printers and publishers of machinery and equipment and parts therefor and accessories thereto for use directly in the production of newspapers, magazines and other printed matter for sale are exempt from sales tax.  Included herein are custom made plates and dies when title thereto does not pass to the printers' customers.  Sales to commercial printers and publishers of tangible personal property such as wood and metal which is used to fabricate plates and dies for use in the production of printed matter for sale are exempt from sales tax when title to the plates and dies does not pass to the printers' customers.  Sales to commercial printers and publishers of machinery, equipment, film, and similar items of tangible personal property for use or consumption directly in the production of the plates and dies are also exempt from sales tax.  It is a printing trade practice that title to lithographic and gravure plates and dies is retained by the printer or publisher.  Unless it is otherwise agreed in writing, the items purchased by the printer or publisher are exempt from sales tax. 

(d)  Sales to commercial printers of custom made plates and dies for resale are exempt from sales or use tax when supported by Streamlined Sales and Use Tax Agreement Certificates of Exemption, Form E-595E.  Sales to commercial printers of tangible personal property as wood and metal which becomes a component part of printing plates produced by the printers for sale to customers are likewise exempt from sales or use tax when supported by certificates of exemption.  However, sales to commercial printers of machinery, equipment, film, and similar items of tangible personal property which do not enter into or become a component part of the plates and dies but are used or consumed by the printer in the direct production of the plates and dies are exempt from sales tax.  When, at the request of the customer, commercial printers purchase custom made printing plates and dies for use in the direct production of the printed matter or when they purchase wood and metal which becomes a component part of printing plates and dies fabricated by the printer for use in the direct production of printed matter and title to the plates and dies passes to the printers' customers, the items may be purchased for resale.  The printer is liable for collecting and remitting the applicable statutory state and local sales or use tax on the total retail sales price of the plates and dies including charges for tangible personal property and art work or any other services that go into the manufacture or delivery thereof.  In such cases, the printer's sales invoices and records must show that the plates and dies are actually sold to the customer; otherwise, the items are deemed to have been used by the printer, and the cost price of same is exempt from sales tax.

(e)  Sales to commercial printers and publishers of tangible personal property which is not resold as such or which does not become an ingredient or component part of the tangible personal property which they produce for sale or which is not production machinery or parts therefor and accessories thereto are subject to the applicable statutory state and local sales or use tax.

(f)  The provisions of Paragraph (d) of this Rule have no application to sales of printing equipment and supplies to firms which operate print shops for the production of printed matter for their own use and not for sale.  Purchases of printing equipment and supplies by such firms are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.5; 105‑164.6; 105‑164.13; 105‑262; 105‑264; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; April 1, 2001; October 1, 1993; June 1, 1992; October 1, 1991; February 1, 1988.

 

17 NCAC 07B .4702          PRINTING OF CONTAINERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. April 1, 2006.

 

17 NCAC 07B .4703          PRINTING CHARGES

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 3, 1984.

 

17 NCAC 07B .4704          PLATES FOR PRINTING CONTAINERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. November 1, 1982.

 

17 NCAC 07B .4705          PRINTING SURFACE SUPPLIES

17 NCAC 07B .4706          OFFSET PRINTING EQUIPMENT

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991;

Repealed Eff. April 1, 2006.

 

17 NCAC 07B .4707          PRINTING CHEMICALS

Sales of chemicals to commercial printers or publishers which enter into or become an ingredient or component part of printed matter which such purchasers sell are exempt from sales and use tax.  Chemicals used by commercial printers and publishers for sanitation purposes are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .4708          POSTAGE CHARGES BY PRINTERS

When a printer purchases postal cards or stamped envelopes and prints and sells them to customers for use, the printer is liable for collecting and remitting the applicable statutory state and local sales or use tax on the charge to the customer; except the postage charges on the printed cards or envelopes are exempt from tax when separately stated on the customer's invoice.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; July 5, 1980.

 

17 NCAC 07B .4709          BOOKBINDING SUPPLIES: PRINTERS

Sales of padding cement, stripping tape and stitching wire used to bind or join forms, booklets, etc., printed by commercial printers for sale are exempt from tax as an ingredient or component part of the manufactured products.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .4710          Bookbinders

 

History Note:        Authority G.S. 105-164.4; 105-164.5; 105-164.6; 105-262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991;

Repealed Eff. June 1, 2016.

 

17 NCAC 07B .4711          GAS SOLD TO PRINTERS

17 NCAC 07B .4712          METAL FOR MAKING TYPE

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; May 1, 1985;

Repealed Eff. April 1, 2006.

 

17 NCAC 07B .4713          TYPEWRITERS SOLD TO PRINTERS

Typewriters used for administrative purposes are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4714          MOUNTING TAPE SOLD TO PRINTERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. April 1, 2006.

 

17 NCAC 07B .4715          NEWSPAPER PUBLISHERS: MACHINERY

Sales of machines to newspaper publishing companies for use in printing their customers' addresses are subject to the applicable statutory state and local sales or use tax without any maximum tax applicable thereto.  Sales of addressograph plates to commercial printers for use in the mailing and shipping process are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .4716          TYPESETTING

Charges made by typesetters for setting type for users, are charges for services rendered and receipts therefrom are exempt from tax.  Typesetters are liable for remitting the applicable statutory state and local sales or use tax on purchases of metal or other tangible personal property for use in performing such services.  Charges by typesetters to commercial printers for reproduction proofs used in the production of printed matter are not subject to the tax.  Purchases of proof paper and ink by typesetters for use in the production of proofs for sale are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. April 1, 2006; October 1, 1993; October 1, 1991; October 1, 1990.

 

17 NCAC 07B .4717          PHOTOGRAPHS: NEWSPAPERS

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. April 1, 2006.

 

17 NCAC 07B .4718          REPRODUCTION PROOFS

Sales of reproduction proofs to commercial printers to be used to produce negatives which are then used to produce plates for the printing of tangible personal property for sale are exempt from tax.

 

History Note:        Authority G.S. 105‑164.3; 105‑262;

Eff. February 1, 1976.

 

SECTION .4800 ‑ BASIS OF REPORTING

 

 

17 NCAC 07B .4801          VENDOR'S RECORDS

Every vendor must keep adequate and complete records as required by G.S. 105‑164.31 to determine the amount of sales and use tax for which he may be liable.  Vendors having both cash and credit sales may elect to report their tax liability on either the cash or accrual basis of accounting provided their records are kept in such a manner that they can determine their tax liability correctly on the basis used.  If a taxpayer wishes to change from one basis of reporting to another, he must apply to the Secretary of Revenue for permission to make such change.

 

History Note:        Authority G.S. 105‑164.22; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993.

 

17 NCAC 07B .4802          ACCRUAL BASIS

When a vendor elects to report and pay tax on the accrual basis he must keep records which disclose a separate accounting of taxable and nontaxable sales.  The vendor must pay tax on the total sales price of all taxable tangible personal property sold during the month covered by the return, whether or not such sales are cash, credit, installment or conditional sales and whether or not the vendor retains the installment and conditional sales contracts or sells or assigns them to others and without regard to any finance reserve withheld on finance paper sold or assigned to others.  Finance charges, service charges or interest from credit extended under conditional sales contracts providing for deferred payment of the purchase price are not subject to tax if such charges are separately stated on the invoices given to the customers at the time of sale and in the vendor's records of sales.  If, in reporting on the accrual basis, accounts of purchasers representing taxable sales on which the tax has been paid are found to be worthless and actually charged off for income tax purposes, the amount charged off representing taxable sales may at corresponding periods be deducted from gross sales provided the vendor maintains records disclosing separately that portion of bad accounts representing taxable sales and that portion representing nontaxable sales.  Accounts charged off as bad debts must be added to gross sales if afterwards collected.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.22; 105.262;

Eff. February 1, 1976.

 

17 NCAC 07B .4803          CASH BASIS

(a)  When a vendor having both taxable and nontaxable sales elects to report and pay tax on the cash basis, the vendor must keep records which disclose a separate accounting of taxable and nontaxable sales and receipts on sales.  Such vendor must pay tax on the total sales price of all taxable tangible personal property sold for cash during the month covered by the return and on that portion of the sales price collected or constructively received during such month on taxable tangible personal property sold on credit, installment or other deferred payment sales contracts without any arbitrary allocation for finance charges, service charges or interest charges.  Finance charges, service charges and interest charges for credit extended under conditional sales contracts providing for deferred payment of the purchase price are not subject to the tax if such charges are separately stated on the invoices given to the customers at the time of sale and in the vendor's records of sales and collections.  If, on conditional, installment or other deferred payment sales, the vendor sells or assigns the finance paper, he is deemed to have received the full balance of the consideration for the sale of tangible personal property and is liable for remitting tax on the total sales price of such property at the close of the month during which the paper was assigned or sold including any finance reserve withheld on the finance paper.  If such vendor sells his accounts receivable he is liable for payment of tax on the outstanding taxable balance of such accounts at the time they are sold notwithstanding that the accounts may be sold at a discount to the purchaser.

(b)  When persons filing their sales tax reports on the cash basis of accounting sell their accounts receivable, they are liable for payment of sales tax on their taxable accounts receivable balance outstanding at the time they sell such accounts.  When a corporation is formed to succeed a proprietorship or partnership and the accounts receivable are sold to the corporation, the proprietorship or partnership is liable for remitting the sales tax due on its outstanding taxable accounts receivable balance at the time the accounts are sold.

 

History Note:        Authority G.S. 105‑164.3; 105‑164.22; 105‑262;

Eff. February 1, 1976.

 

section .4900 – transportation charges

 

17 NCAC 07B .4901          SHIPMENTS FROM OUTSIDE NORTH CAROLINA

17 NCAC 07B .4902          SHIPMENTS FROM WITHIN NORTH CAROLINA

 

History Note:        Authority G.S. 105‑164.12; 105‑262;

Eff. February 1, 1976.

Amended Eff. August 1, 1996; October 1, 1993; October 1, 1991;

Repealed Eff. August 1, 2002.

 

SECTION .5000 ‑ EYEGLASSES AND OTHER OPHTHALMIC AIDS AND SUPPLIES:      OCULISTS: OPTOMETRISTS AND OPTICIANS

 

 

 

17 NCAC 07B .5001          PRESCRIPTION EYEGLASSES

Sales of eyeglasses ground on prescription of physicians, oculists or optometrists, including frames as an integral part thereof, are not subject to the tax.

 

History Note:        Authority G.S. 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .5002          EYEGLASS FRAMES

(a)  Eyeglass frames sold in connection with the repair or replacement of eyeglasses ground on prescription of physicians, oculists, or optometrists are not subject to the tax.

(b)  Sales of eyeglass frames, cases, optical merchandise and optical supplies by optical supply houses and opticians to registered merchants, including oculists and optometrists, for resale are not subject to the tax.

 

History Note:        Authority G.S. 105‑164.5; 105‑164.13; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .5003          OPHTHALMIC INSTRUMENTS

Sales of ophthalmic instruments and supplies to physicians, oculists, optometrists and other users are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. May 1, 2009; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .5004          TAXABLE OPTICAL SUPPLIES

All sales to users or consumers of eyeglass frames not for use in connection with eyeglasses ground on prescription, sunglasses not ground on prescription, solutions for cleaning eyeglasses, telescopes, binoculars, opera glasses, and similar items, by whomsoever made, are subject to the applicable statutory state and local sales or use tax.  In addition, the retail sale of nose pads, temples and any other repair parts for eyeglass frames are subject to the tax without regard to whether the repair parts are sold to be used on frames with prescription lens.  All persons, including opticians, optometrists, and oculists, making such sales shall register as retail merchants and collect and remit the tax due thereon.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44; Article 46;

Eff. February 1, 1976;

Amended Eff. October 1, 2009; October 1, 1993; October 1, 1991.

 

SECTION .5100 ‑ LEASED DEPARTMENTS AND TRANSIENT SELLERS

 

 

17 NCAC 07B .5101          LEASED DEPARTMENTS

Where a store or other business has leased certain of its departments to other persons who make therein retail sales of tangible personal property, the lessee of each such leased department shall register with the North Carolina Department of Revenue and shall also, unless the Secretary has in writing agreed otherwise, file separate sales and use tax returns monthly.  If the lessor keeps the books for the lessee and makes collections on account of the lessee's sales, the lessor may, as agent for the lessee, file the required separate monthly returns for each such lessee and pay to the Department the taxes due.  However, the lessee shall not be relieved of his tax liability if the lessor fails to make the proper returns or fails to remit to the Department all taxes due by reason of the business conducted by the lessee.

 

History Note:        Authority G.S. 105‑164.16; 105‑262;

Eff. February 1, 1976.

 

17 NCAC 07B .5102          TRANSIENT SELLERS

Persons engaged in business selling tangible personal property, whether through stores, from private residences, from trucks and wagons, by house‑to‑house canvass, or in any other manner whatsoever, are required to register with the Department and collect and remit the applicable state and local sales or use tax.  Producers are deemed to be selling in their capacity as producers when making sales on foot or from trucks or wagons.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.13; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; March 1, 1993; October 1, 1991.

 

SECTION .5200 ‑ BABY CHICKS AND POULTS

 

17 NCAC 07B .5201          CHICKS: EGGS: EXEMPTION

The following sales are exempt from tax:

(1)           sales of baby chicks and poults to poultry farmers, egg producers and hatcheries for commercial poultry or egg production;

(2)           sales of eggs to be used in hatching baby chicks and poults which will be sold or used for commercial poultry or egg production;

(3)           all sales of eggs, baby chicks and poults for resale, irrespective of by whom sold;

(4)           sales of eggs, baby chicks and poults by egg producers and poultry farmers when such sales are made by them in their capacity as producers; Generally, hatcheries do not qualify as producers of farm products within the provisions of G.S. 105‑164.13(4b).  Hatchery sales which are not exempt under Subparagraphs (1), (2) or (3) of this Rule are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105-164.4; 105‑164.13; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991.

 

17 NCAC 07B .5202          CHICKS: EGGS: TAXABLE

All sales of eggs, baby chicks and poults which do not qualify for exemption under one or more of the provisions above set forth in 17 NCAC 07B .5201 are subject to the applicable statutory state and local sales or use tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑262; Article 39; Article 40; Article 42; Article 43;

Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; October 1, 1993; October 1, 1991.

 

SECTION .5300 ‑ CERTIFICATE OF AUTHORITY: BOND REQUIREMENTS

 

17 NCAC 07B .5301          CERTIFICATE OF AUTHORITY

The direct pay certificate authorized by G.S. 105-164.27 replaces the certificate of authority.  Form E-595A is an application for a direct pay certificate.  The Secretary will issue a direct pay certificate to all taxpayers who have a certificate of authority as of December 31, 2000.  A taxpayer with a certificate of authority as of that date does not need to apply for a direct pay certificate.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.27; 105‑262;

Eff. February 1, 1976;

Amended Eff. April 1, 2001; October 1, 1993; February 1, 1987; January 1, 1982.

 

17 NCAC 07B .5302          PROPER USE OF CERTIFICATE OF AUTHORITY

 

History Note:        Authority G.S. 105‑64.4; 105‑164.6; 105‑262;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

SECTION .5400 ‑ FORMS USED FOR SALES AND USE TAX PURPOSES

 

 

17 NCAC 07B .5401          MONTHLY SALES AND USE TAX REPORT FORM: E‑500

17 NCAC 07B .5402          QUARTERLY SALES AND USE TAX REPORT FORM: E‑500B

17 NCAC 07B .5403          SALES AND USE TAX CHART: E‑502: THREE PERCENT

17 NCAC 07B .5404          SALES AND USE TAX CHART: E‑502A: FOUR PERCENT

17 NCAC 07B .5405          REG. APPLICATION: SALES/USE TAX AND/OR INC TAX WITHHOLDING FORM AS/RP1

17 NCAC 07B .5406          NOTICE OF PROPOSED TAX ASSESSMENT FORM: DOR 20

 

History Note:        Authority G.S. 105-164.4; 105-164.5; 105-164.6; 105‑164.15; 105‑164.16; 105‑164.29; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 1994; October 1, 1993; October 1, 1990; July 1, 1990; January 1, 1982;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5407          PROPOSED ASSESSMENT OF WHOLESALE LICENSE FEE FORM: E‑510B

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. February 1, 1976;

Repealed Eff. October 1, 1990.

 

17 NCAC 07B .5408          APPLICATION FOR RENEWAL OF WHOLESALE LICENSE FORM: E‑514

17 NCAC 07B .5409          NOTICE OF DELINQUENT TAX REPORT FORM: E‑515

17 NCAC 07B .5410          EXTENSION OF TIME FOR FILING SALES AND USE TAX REPORT FORM: E‑517

17 NCAC 07B .5411          CERTIFICATE OF OVERPAYMENT FOR 90 DAYS FORM: E‑525

17 NCAC 07B .5412          CERTIFICATE OF OVERPAYMENT FORM: E‑525B

 

History Note:        Authority G.S. 105‑164.5; 105‑164.15; 105‑164.19; 105‑164.29; 105‑262;

Eff. February 1, 1976;

Amended Eff. July 1, 1994; October 1, 1993; October 1, 1990; January 1, 1982;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5413          NOTICE OF PENALTY ASSESSMENT FORM: E‑529

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. February 1, 1976;

Repealed Eff. October 1, 1990.

 

17 NCAC 07B .5414          RECEIPT FOR SALES TAX PAID FORM: E‑532

17 NCAC 07B .5415          MERCHANTS CERTIFICATE OF REGISTRATION FORM: E‑533

17 NCAC 07B .5416          SCHEDULE OF COUNTY SALES AND USE TAXES FORM: E‑536

17 NCAC 07B .5417          CERTIFICATE OF AUTHORITY FORM: E‑537

17 NCAC 07B .5418          BOND FORM: E‑537A

17 NCAC 07B .5419          NUMERICAL AND ALPHABETICAL LIST OF COUNTIES IN N.C. FORM: E‑540

17 NCAC 07B .5420          ANALYSIS OF TAX BY LEASED DEPARTMENT FORM: E‑541

17 NCAC 07B .5421          ANALYSIS OF STATE SALES AND USE TAX BY CITY FORM: E‑543

17 NCAC 07B .5422          SALES REPORT FOR FAIR CONCESSIONS FORM: E‑557

17 NCAC 07B .5423          LIST OF POST OFFICES IN TAXING COUNTIES FORM: E‑562

17 NCAC 07B .5424          NOTICE OF AMENDED ASSESSMENT FORM: E‑567A

 

History Note:        Authority G.S. 105-164.4; 105-164.6; 105‑164.15; 105‑164.6; 105‑164.16; 105‑164.29; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; November 1, 1982;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5425          NONRESIDENT MERCHANTS REGISTRATION APPLICATION FORM: E‑572

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. February 1, 1976;

Repealed Eff. August 1, 1988.

 

17 NCAC 07B .5426          NONRESIDENT MERCHANTS REGISTRATION CERTIFICATE FORM: E‑573

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. February 1, 1976;

Repealed Eff. August 1, 1988.

 

17 NCAC 07B .5427          NONRESIDENT MERCHANTS CERTIFICATE OF RESALE FORM: E‑574

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. February 1, 1976;

Repealed Eff. August 1, 1988.

 

17 NCAC 07B .5428          MANUFACTURERS CERTIFICATE FORM: E‑575

17 NCAC 07B .5429          INTERSTATE CARRIER CLAIM FOR REFUND FORM: E‑581

17 NCAC 07B .5430          CLAIM FOR REFUND OF TAXES FORM: CHURCHES: ETC.: E‑585

17 NCAC 07B .5431          CLAIM FOR REFUND OF TAXES FORM: GENERAL REFUND: E‑588

17 NCAC 07B .5432          AFFIDAVIT FORM: E‑589

17 NCAC 07B .5433          CERTIFICATE OF RESALE FORM: E‑590

 

History Note:        Authority G.S. 105‑164.14; 105‑164.15; 105‑164.28; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; March 1, 1993; October 1, 1991; August 1, 1988;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5434          COMMERCIAL FISHERMAN'S CERTIFICATE FORM: E‑558

 

History Note:        Authority G.S. 105‑164.13; 105‑164.15; 105‑262; 105‑264; 113‑154; 113‑155;

Eff. September 30, 1977;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5435          CONTRACTOR'S AND SUBCONTRACTOR'S CERTIFICATE FORM: E‑580.

 

History Note:        Authority G.S. 105‑164.13; 105‑164.15; 105‑262; 105‑264; 113‑154; 113‑155;

Eff. September 30, 1977;

Amended Eff. October 1, 1993; March 15, 1980;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5436          FARMER'S CERTIFICATE FORM: E‑599

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.15; 105‑262; 105‑264;

Eff. September 30, 1977;

Repealed Eff. April 1, 1995.

 

17 NCAC 07B .5437          VETERINARIAN'S CERTIFICATE FORM: E‑567

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑164.15; 105‑262; 105‑264;

Eff. March 15, 1980;

Repealed Eff. April 1, 1995.

 

17 NCAC 07B .5438          LOGGING AND PULPWOOD CERTIFICATE FORM: E‑526

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.15; 105‑262; 105‑264;

Eff. March 15, 1980;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5439          MOTOR VEHICLE EXEMPTION FORM: E‑599B

 

History Note:        Authority G.S. 105‑164.13; 105‑164.15; 105‑262; 105‑264;

Eff. March 15, 1980;

Amended Eff. July 1, 1990;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .5440          PURCHASER'S AFFIDAVIT OF EXPORT FORM: E‑599C

 

History Note:        Authority G.S. 105‑164.13; 105‑164.15; 105‑262; 105‑264;

Eff. March 15, 1980;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5441          AFFIDAVIT FOR USE TAX FORM: E‑589A (MECKLENBURG COUNTY)

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. January 1, 1982;

Repealed Eff. October 1, 1990.

 

17 NCAC 07B .5442          REQUEST FOR SALES/USE TAX CREDIT BY VENDEE FORM: E‑599M

 

History Note:        Authority G.S. 105‑164.15; 105‑262; 105‑264;

Eff. November 1, 1982;

Amended Eff. October 1, 1993;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5443          SALES AND USE TAX CHART: E‑502C: SIX PERCENT

 

History Note:        Authority G.S. 105‑164.15; 105‑262;

Eff. January 3, 1984;

Amended Eff. October 1, 1991; August 1, 1988;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5444          SEMIMONTHLY SALES AND USE TAX REPORT FORM: E‑500D

 

History Note:        Authority G.S. 105‑164.4; 105‑164.16(b); 105‑262;

Eff. February 1, 1986;

Amended Eff. October 1, 1993; October 1, 1990;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5445          COMMERCIAL LIVESTOCK/POULTRY FARMERS' CERT. FORM: E‑599S

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1987;

Amended Eff. October 1, 1993;

Repealed Eff. May 1, 1995.

 

17 NCAC 07B .5446          CERTIFICATE OF EXEMPTION FORM: E‑599T

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. March 1, 1987;

Repealed Eff. October 1, 1993.

 

17 NCAC 07B .5447          MOTOR VEHICLE LEASE AND RENTAL REPORT FORM: E‑500F

17 NCAC 07B .5448          SCRAP TIRE DISPOSAL TAX REPORT FORM: E‑500G

 

History Note:        Authority G.S. 105‑164.15; 105‑187.5; 105‑262; 130A‑309.54;

Eff. July 1, 1990;

Amended Eff. October 1, 1993; October 1, 1991;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5449          MONTHLY SALES AND USE TAX REPORT FORM: E‑500C

17 NCAC 07B .5450          NOTICE FOR TAXPAYERS FILING THIRTEEN REPORTS A YEAR FORM: E‑517A

17 NCAC 07B .5451          NOTICE FOR TAXPAYERS FILING TWENTY‑SIX REPORTS/YEAR FORM: E‑517B

17 NCAC 07B .5452          EXTENSION OF TIME FOR FILING SALES AND USE TAX REPORT FORM: E‑517C

17 NCAC 07B .5453          SPECIAL SALES AND USE TAX REMITTANCE FORM: E‑503

17 NCAC 07B .5454          NOTICE OF TAX DUE FORM: DOR 31

17 NCAC 07B .5455          NOTICE OF TAX DUE FORM: DOR 31A

17 NCAC 07B .5456          NOTICE TO NEWLY REGISTERED WHOLESALE MERCHANTS FORM: E‑552

17 NCAC 07B .5457          NOTICE TO ALL TAXPAYERS FORM: E‑505AC

17 NCAC 07B .5458          UTILITIES AND MUNICIPALITIES SALES TAX REPORT FORM: E‑500E

 

History Note:        Authority G.S. 105‑164.4(a)(4a); 105‑164.4(a)(4c); 105‑164.15; 105‑164.16; 105‑164.19; 105‑262;

Eff. October 1, 1990;

Amended Eff. October 1, 1993; June 1, 1992;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5459          CLAIM FOR REFUND OF COUNTY SALES AND USE TAXES FORM: E‑585E

 

History Note:        Authority G.S. 105‑164.14; 105‑164.15; 105‑262; 105‑264;

Eff. October 1, 1991;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5460          USE TAX REPORT FORM: E‑554

 

History Note:        Authority G.S. 105‑164.3; 105‑164.6; 105‑164.8; 105‑262;

Eff. June 1, 1992;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5461          CLAIM FOR REFUND OF STATE AND COUNTY SALES/USE TAXES FORM: E‑585C

 

History Note:        Authority G.S. 105‑164.14; 105‑164.15; 105‑262;

Eff. October 1, 1993;

Repealed Eff. April 1, 1999.

 

17 NCAC 07B .5462          RESERVED FOR FUTURE CODIFICATION

 

17 NCAC 07B .5463          CLAIM FOR REFUND OF WHITE GOODS DISPOSAL TAX FORM: E‑585W

 

History Note:        Authority G.S. 105‑164.14; 105‑164.15; 105‑187.23; 105‑262;

Eff. July 1, 1994;

Repealed Eff. April 1, 1999.

 

 

 

SUBCHAPTER 7C ‑ LOCAL GOVERNMENT: MECKLENBURG COUNTY: SUPPLEMENTAL LOCAL GOVERNMENT AND ADDITIONAL SUPPLEMENTAL LOCAL GOVERNMENT

SALES AND USE TAX ACTS

 

SECTION .0100 ‑ LOCAL GOVERNMENT SALES AND USE TAXES

 

17 NCAC 07C .0101         COLLECTION AND ADMINISTRATION OF THE TAX

17 NCAC 07C .0102         COUNTY ELECTIONS

 

History Note:        Authority G.S. 105‑262; 105‑465; 105‑469;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07C .0103         SALES TAX IMPOSED

All retailers making taxable sales from a place of business located within a taxing county must collect and remit any applicable local sales tax of the county in which the retailer's place of business is located.  For local sales tax purposes, the situs of a sale is the retailer's place of business located within a taxing county where the retailer becomes contractually obligated to make the sale.  The term "place of business located within a taxing county" shall mean stores, warehouses, sales offices, sales outlets, inventories, and other places within a taxing county where tangible personal property is maintained for sale, lease, or rental at retail, and it shall include inventories of goods carried on foot or in vehicles for sale to customers in a taxing county.  It shall also include laundries, dry cleaning plants, or similar businesses and hotels, motels, or similar facilities in a taxing county.  Taxable tangible personal property sold at a business location in a taxing county and delivered by retailers, their agents, the U.S. Mail, or by common carrier to the purchaser in that county or in any county in this state is subject to the sales tax of the county in which the retailer's place of business is located at which such retailer becomes contractually obligated to make the sale.

 

History Note:        Authority G.S. 105‑262; 105‑467;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; October 1, 1991; May 1, 1990; July 1, 1989.

 

17 NCAC 07C .0104         USE TAX IMPOSED

17 NCAC 07C .0105         SALES CONTRACTS

 

History Note:        Authority G.S. 105‑262; 105‑467; 105‑468; 105‑468.1;

Eff. February 1, 1976;

Amended Eff. October 1, 1991; July 1, 1989; December 1, 1988; August 1, 1988;

Repealed Eff. October 1, 1993.

 

17 NCAC 07C .0106         BRACKET SYSTEM

17 NCAC 07C .0107         EXEMPTIONS AND EXCLUSIONS

 

History Note:        Authority G.S. 105‑262; 105‑470; 105‑474;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07C .0108         RECORDS TO BE KEPT BY TAXPAYER

 

History Note:        Authority G.S. 105‑262; 105‑474;

Eff. February 1, 1976;

Repealed Eff. August 1, 1988.

 

17 NCAC 07C .0109         DISPOSITION AND DISTRIBUTION OF TAXES COLLECTED

17 NCAC 07C .0110         REPEAL PROVISIONS

 

History Note:        Authority G.S. 105‑262; 105‑272; 105‑273; 105‑473;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

SECTION .0200 ‑ MECKLENBURG COUNTY SALES AND USE TAXES

 

17 NCAC 07C .0201         COLLECTION AND ADMINISTRATION OF THE TAX

17 NCAC 07C .0202         SALES TAX IMPOSED

17 NCAC 07C .0203         USE TAX IMPOSED

 

History Note:        Authority G.S. 105‑262; S.L. 1967, c. 1096, s. 4; S.L. 1967, c. 1096, s. 5; S.L. 1967, c. 1096, s. 6;

Eff. February 1, 1976;

Amended Eff. August 1, 1988; August 1, 1986; February 8, 1981;

Repealed Eff. December 1, 1988.

 

17 NCAC 07C .0204         MAXIMUM TAX

 

History Note:        Authority G.S. 105‑262; S.L. (1967), c. 1096, s. 4 and 5;

Eff. February 1, 1976;

Amended Eff. March 1, 1987; February 1, 1987; January 1, 1982;

Repealed Eff. August 1, 1988.

 

17 NCAC 07C .0205         BRACKET SYSTEM

 

History Note:        Authority G.S. 105‑262; S.L. (1967), c. 1096, s. 7;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07C .0206         EXEMPTIONS AND EXCLUSIONS

 

History Note:        Authority G.S. 105‑262; S.L. 1967, c. 1096, s. 10;

Eff. February 1, 1976;

Amended Eff. January 1, 1982;

Repealed Eff. August 1, 1988.

 

17 NCAC 07C .0207         RECORDS TO BE KEPT BY TAXPAYER

 

History Note:        Authority G.S. 105‑262; S.L. 1967, c. 1096, s. 10;

Eff. February 1, 1976;

Repealed Eff. August 1, 1988.

 

SECTION .0300 ‑ APPLICATION OF LOCAL TAX TO SPECIFIC TRANSACTIONS

 

17 NCAC 07C .0301         LOCAL SALES TAX LEVY

17 NCAC 07C .0302         LOCAL USE TAX LEVY

 

History Note:        Authority G.S. 105‑262; 105‑467; 105‑468; S.L. 1967, c. 1096, s. 4; S.L. 1967, c. 1096, s. 5;

Eff. February 1, 1976;

Repealed Eff. December 1, 1988.

 

17 NCAC 07C .0303         SALES NOT SUBJECT TO COUNTY TAX

 

History Note:        Authority G.S. 105‑262; 105‑467; 105‑468; S.L. 1967, c. 1096, s. 4 and 5;

Eff. February 1, 1976;

Repealed Eff. January 1, 1982.

 

17 NCAC 07C .0304         APPLICATION OF TAX

The following examples of transactions are intended to serve as guides in applying local sales or use tax to sales and purchases of tangible personal property in this state.

(1)           Vendors Making Sales of Tangible Personal Property From a Place of Business in North Carolina:

(a)           A vendor making retail sales from a place of business located in a taxing county must collect and remit the local sales tax for the county in which the vendor's place of business is located.  For sales tax purposes, the situs of the sale is the place in a taxing county where the vendor delivers the property to the purchaser.

(b)           A vendor with a place of business in County A who sends a sales representative into another county to solicit orders, which are accepted at the vendor's place of business in County A and filled by delivery from the vendor's place of business in County A to the purchaser in County B, is liable for collecting and remitting County B's sales tax on these retail sales of tangible personal property.

(c)           A vendor with places of business in County A and County B receives an order at the location in County A, forwards the order to the location in County B for approval and acceptance, and fills the order by delivery from a location in County B to a customer in County A.  County A's tax is due on the sale.

(d)           A vendor with a place of business in County A receives an order which he approves and accepts at the location in County A but fills the order by making shipment from a location in County.  B to the purchaser in County B.  County  B’s sales tax is due on such sales.

(e)           A vendor whose only place of business is in County A receives an order from a customer in County B and the order is approved and accepted in County A but delivery is made from a point in County.  B to the purchaser in County A.  County A's sales tax is due on such sales.

(2)           Vendors Making Sales of Tangible Personal Property From a Place of Business Outside of North Carolina:  An out‑of‑state vendor who is "engaged in business" in North Carolina, as the term is defined by G.S. 105-164.3,is liable for charging or remitting county sales or use tax on all sales of tangible personal property that is sold and delivered from a place of business outside of North Carolina to a purchaser in a county.  The purchaser is liable for remitting the applicable county use tax to the Department of Revenue on the cost price of the tangible personal property if the tax is not collected by the vendor.

(3)           Persons Leasing or Renting Tangible Personal Property From an Inventory of Property in North Carolina are Deemed to Have a Place of Business in the County in Which the Inventory is Located:

(a)           A lessor who maintains an inventory of tangible personal property in a taxing county for the purpose of lease or rental is liable for charging and remitting such county's sales tax on receipts from the lease or rental of such property to lessees in that county for use.

(b)           A lessor who leases tangible personal property from an inventory in a taxing county and ships or delivers the property to a lessee in a county in which he does not have a place of business or an inventory of tangible personal property for the purpose of lease or rental is liable for charging and remitting the county's tax on such lease receipts for the county in which the property is delivered to the lessee.

(c)           If a lessor has an inventory of tangible personal property in two counties and leases property from the inventory in one county to a lessee in the other county and delivers the property to the lessee in the other county in which he also has an inventory, the lessor is liable for charging and remitting the sales tax of the county where the property is delivered to the lessee.

(d)           If a lessor keeps an inventory of tangible personal property in a county where he enters into a contract and becomes contractually bound to lease property to a lessee in that county for use in the general conduct of business within and without that county, the lessor is liable for charging and remitting such county's sales tax on the lease or rental receipts.

(4)           Persons Leasing or Renting Tangible Personal Property From an Inventory of Property Located Outside North Carolina:

(a)           A lessor with an inventory of tangible personal property outside North Carolina who leases or rents property to a lessee in this state for use in a taxing county is liable for charging and remitting such county's use tax on the lease or rental receipts.

(b)           When property that is leased for a definite stipulated period of time is delivered to the lessee prior to the date the tax becomes effective in a taxing county, the lease or rental receipts are not subject to the county tax levied after the delivery of the property.  If the lease is on a month to month basis, the lease receipts for months subsequent to the effective date of the local tax are subject to the tax.

(5)           A person who operates a laundry, dry cleaning plant or similar business in a taxing county is liable for charging and remitting such county's sales tax on receipts derived from the operation of the business.  The tax applies even though the items being cleaned may be picked up from the customers or delivered to them in another county within North Carolina or outside this state.  An independent operator that solicits business on his own account but engages a laundering, dry cleaning or hat blocking firm or similar type business to perform the laundering, dry cleaning or other services is liable for collecting and remitting the county sales tax for the county in which the business is solicited.

(6)           A person who operates a laundry, dry cleaning plant or similar business outside North Carolina and who picks up items from customers in a taxing county, cleans them at the cleaning plant outside this state and then returns them to the customers in the taxing county, is not liable for charging and remitting the taxing county's use tax on the receipts from the cleaning services.

 

History Note:        Authority G.S. 105‑262; 105‑467; 105‑468; S.L. 1967, c. 1096, s. 4 and 5;

Eff. February 1, 1976;

Amended Eff. August 1, 2002; July 1, 1989; November 1, 1982; January 1, 1982.

 

SECTION .0400 ‑ SUPPLEMENTAL LOCAL GOVERNMENT SALES AND USE TAX ACT

 

17 NCAC 07C .0401         TAX IMPOSED

17 NCAC 07C .0402         SALES CONTRACTS

 

History Note:        Authority G.S. 105‑262; 105‑483;

Eff. January 3, 1984;

Repealed Eff. December 1, 1988.

 

SECTION .0500 ‑ ADDITIONAL SUPPLEMENTAL LOCAL GOVERNMENT SALES AND USE TAX ACT

 

17 NCAC 07C .0501         TAX IMPOSED

17 NCAC 07C .0502         DISTRIBUTION OF ADDITIONAL TAXES

17 NCAC 07C .0503         SALES CONTRACTS

 

History Note:        Authority G.S. 105‑262; 105‑498; 105‑501;

Eff. February 1, 1987;

Repealed Eff. December 1, 1988.

 

 

 

subchapter 07D - Manufacturing Fuel and Certain Machinery and Equipment Privilege Tax

 

SECTION .0100 ‑ GENERAL APPLICATION OF PRIVILEGE TAX TO MANUFACTURING AND INDUSTRIAL PROCESSING

 

17 NCAC 07D .0101         PRIVILEGE TAX ON MANUFACTURING AND PROCESSING MACHINERY

17 NCAC 07D .0102         CLASSIFICATION OF MANUFACTURING ACTIVITIES FOR PRIVILEGE TAX

17 NCAC 07D .0103         SALES BY MANUFACTURERS

17 NCAC 07D .0104         PURCHASES BY MANUFACTURERS

 

History Note:        Authority G.S. 105-164.3; 105‑164.4; 105‑164.6; 105‑164.13; 105‑164.28; 105-187.50; 105‑187.51; 105-187.51A; 105‑187.52; 105‑262; 105‑264; Articles 39, 40, 42, 43, 44;

Eff. July 1, 2006;

Expired Eff. July 1, 2018 pursuant to G.S. 150B-21.7.

 

SECTION .0200 ‑ SPECIFIC TANGIBLE PERSONALTY CLASSIFIED FOR USE BY INDUSTRIAL USERS SUBJECT TO THE PRIVILEGE TAX OR SALES AND USE TAX

 

17 NCAC 07D .0201         MILL MACHINERY

17 NCAC 07D .0202         ITEMS NOT MILL MACHINERY

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-187.51; 105-187.52; 105‑262; Articles 39, 40, 42, 43,44;

Eff. July 1, 2006;

Repealed Eff. July 1, 2018 pursuant to G.S. 150B-21.7.