North Carolina § 105-164 - 28A. Other exemption certificates.

§ 105-164. 28A. Other exemption certificates.

Authorization. - The Secretary may require a person who purchases an item that is exempt from tax to obtain an exemption certificate from the Department to receive the exemption. The Department must issue a use-based exemption number to a person who qualifies for the exemption. A person who no longer qualifies for a use-based exemption number must notify the Secretary within 30 days to cancel the number. Scope. - This section does not apply to a direct pay permit or a certificate of exemption. G.S. 105-164.27A addresses a direct pay permit, and G.S. 105-164.28 addresses a certificate of exemption. Administration. - This section shall be administered in accordance with G.S. 105-164.28. Additionally, the provisions of this section may also apply to a conditional exemption certificate issued to a person in accordance with G.S. 105-164.13E. An exemption certificate issued by the purchaser authorizes a retailer to sell an item to the holder of the certificate and not collect tax on the sale. A person who no longer qualifies for an exemption certificate must give notice to each seller that may rely on the exemption certificate on or before the next purchase. A person who purchases an item under an exemption certificate is liable for any tax due on the purchase if the Department determines that the person is not eligible for the exemption certificate or if the person purchased items that do not qualify for an exemption under the exemption certificate. The liability is relieved when the seller obtains the purchaser's name, address, type of business, reason for exemption, and exemption number in lieu of obtaining an exemption certificate. History (2002-184, s. 12; 2009-451, s. 27A.3(s); 2013-414, s. 43(b); 2014-3, s. 3.1(b); 2019-6, s. 5.6.) Editor's Note. - Session Laws 2014-3, s. 3.1(d), provides: "A person who has an agricultural exemption certificate number issued prior to July 1, 2014, that meets the requirements of G.S. 105-164.13 E for a qualifying farmer should apply for a new agricultural exemption certificate number before July 1, 2014, for use for qualifying purchases made on or after October 1, 2014. A person that meets the requirements of G.S. 105-164.13 E for a qualifying farmer and who has an agricultural exemption certificate number issued prior to July 1, 2014, may continue to use that agricultural exemption certificate number for qualifying purchases made prior to October 1, 2014." Session Laws 2014-3, s. 3.1(e), provides: "A person who has an agricultural exemption certificate number issued before July 1, 2014, that does not meet the requirements of G.S. 105-164.13 E for a qualifying farmer must give notice to a seller that the person no longer qualifies for an exemption for purchases made on or after July 1, 2014, and the seller must collect any tax due on the sale. A seller that relies on a copy of an agricultural certificate of exemption and meets the requirements of G.S. 105-164.28 is not liable for any tax due on the sale." Session Laws 2014-3, s. 3.1(f), made the amendment to this section by Session Laws 2014-3, s. 3.1(b), applicable to purchases made on or after July 1, 2014. Effect of Amendments. - Session Laws 2009-451, s. 27A.3(s), effective August 7, 2009, in subsection (a), substituted "an item" for "tangible personal property" three times, and "item" for "property" twice. Session Laws 2013-414, s. 43(b), effective August 23, 2013, in subsection (a), deleted "or the item was not sued as intended" at the end of the third sentence, and added the fourth sentence; substituted "exemption" for "resale" twice in subsection (b); and added subsection (c). Session Laws 2014-3, s. 3.1(b), effective July 1, 2014, rewrote subsection (a); and added the last sentence in subsection (c). See Editor's note for applicability. Session Laws 2019-6, s. 5.6, effective March 20, 2019, in subsection (a), in the first paragraph, in the first sentence, deleted "or is subject to a preferential rate of tax depending on the status of the purchaser or the intended use of the item" following "exempt from tax" near the middle, and substituted "exemption" for "exemption or preferential rate" at the end, in the second sentence, deleted "preferential rate or" preceding "use-based" near the middle, and substituted "exemption" for "exemption or preferential rate" at the end, and in the last sentence, deleted "preferential rate or" preceding "use-based", and in the second paragraph, in the first sentence, deleted "either collect tax at a preferential rate or" following "certificate and" near the middle, and substituted "sale" for "sale, as appropriate" at the end.