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.