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.