17 NCAC 07D .0103          SALES BY MANUFACTURERS

(a)  Sales of tangible personal property by a manufacturer to a registered retailer or a wholesale merchant in this State for the purpose of resale are not subject to sales or use tax if the transactions are supported by properly executed Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption.

(b)  Sales of tangible personal property by a manufacturer to a nonresident retail or wholesale merchant for the purpose of resale in another state are not subject to sales or use tax even though the property is delivered to purchasers in this State if the nonresident retail or wholesale merchant is registered for sales and use tax purposes in a taxing jurisdiction outside this State and the transactions are supported by properly executed Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption.

(c)  Sales of tangible personal property by a manufacturer who delivers the property to purchasers outside this  State or who delivers the property to a common carrier or to the mails for delivery to purchasers at a point outside this State are not subject to sales or use tax.  These sales must be supported by the prescribed records.

(d)  Sales of tangible personal property by manufacturers to nonregistered merchants in this State and sales to nonregistered nonresident merchants who accept delivery of the property in this State are subject to the applicable statutory state and local sales or use tax unless specifically exempt from tax.

(e)  Manufacturers who make sales to registered merchants for resale or sales that are otherwise exempt from the sales and use tax are not required to report the sales to the Department; however, manufacturers making taxable retail sales or purchases subject to the applicable statutory state and local use tax must register with the Department and file sales and use tax reports reflecting the taxable sales or purchases and pay the applicable statutory sales and use tax due thereon.

(f)  A manufacturer becomes liable for the applicable state sales and use tax on its sales of tangible personal property when it sells directly to users and consumers, including employees.  These sales include all of the following:

(1)           sales of bottled drinks by a bottling plant to users and consumers, including employees.

(2)           sales to employees or other persons of food products, meals, and other prepared foods by an industrial plant or other business of any kind through a commissary, concession stand, cafeteria, lunch stand, or other similar place.

(3)           sales of fuel, hosiery, furniture, or any other kind of taxable tangible personal property to employees or any other users or consumers.

(g)  A manufacturer's casual or occasional sale of its worn out, obsolete, or surplus machinery, accessories, and similar items are not subject to the sales and use tax.  A manufacturer that purchases such worn out, obsolete, or surplus machinery, accessories, and similar items is not liable for paying the privilege tax on such purchases.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105‑164.13; 105‑164.28; 105-187.51; 105-187.52; 105‑262; Articles 39, 40, 42, 43, 44;

Eff. July 1, 2006.