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.