North Carolina § 105-467 - Scope of sales tax.

§ 105-467. Scope of sales tax.

Sales Tax. - The sales tax that may be imposed under this Article is limited to a tax at the rate of one percent (1%) of the following: A retailer's net taxable sales and gross receipts that are subject to the general rate of sales tax imposed by the State under G.S. 105-164.4 except the tax does not apply to the sales price of an item taxable under G.S. 105-164.4(a)(1a). through (4) Repealed by Session Laws 2011-330, s. 45, effective June 27, 2011. The sales price of a bundled transaction that includes food subject to tax under subdivision (5) of this subsection, if the price of the food exceeds ten percent (10%) of the price of the bundle. A retailer must determine the price of food in a bundled transaction in accordance with G.S. 105-164.4D. Repealed by Session Laws 2013-3.4(c), effective July 1, 2014, and applicable to purchases made on or after that date. Exemptions and Refunds. - The State exemptions and exclusions contained in Article 5 of Subchapter I of this Chapter, except for the exemption for food in G.S. 105-164.13B, apply to the local sales and use tax authorized to be levied and imposed under this Article. The State refund provisions contained in G.S. 105-164.14 and G.S. 105-164.14A apply to the local sales and use tax authorized to be levied and imposed under this Article. A refund of an excessive or erroneous State sales tax collection allowed under G.S. 105-164.11 and a refund of State sales tax paid on a rescinded sale or cancelled service contract under G.S. 105-164.11A apply to the local sales and use tax authorized to be levied and imposed under this Article. The aggregate annual local refund amount allowed an entity under G.S. 105-164.14(b) for the State's fiscal year may not exceed thirteen million three hundred thousand dollars ($13,300,000). Sourcing. - The sourcing principles in Article 5 of Subchapter I of this Chapter apply in determining whether the local sales tax applies to a transaction. (5) The sales price of food that is not otherwise exempt from tax pursuant to G.S. 105-164.13 but is exempt from the State sales and use tax pursuant to G.S. 105-164.13 B. (6), (7) Repealed by Session Laws 2011-330, s. 45, effective June 27, 2011. (8) The presumed sales price of an item of tangible personal property under G.S. 105-164.12 B. Except as provided in this subsection, a taxing county may not allow an exemption, exclusion, or refund that is not allowed under the State sales and use tax. A local school administrative unit and a joint agency created by interlocal agreement among local school administrative units pursuant to G.S. 160A-462 to jointly purchase food service-related materials, supplies, and equipment on their behalf is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of items. Sales and use tax liability indirectly incurred by the entity as part of a real property contract for real property that is owned or leased by the entity and is a capital improvement for use by the entity is considered a sales or use tax liability incurred on direct purchases by the entity for the purpose of this subsection. The refund allowed under this subsection does not apply to purchases of electricity, telecommunications service, ancillary service, piped natural gas, video programming, or a prepaid meal plan. A request for a refund is due in the same time and manner as provided in G.S. 105-164.14(c) . Refunds applied for more than three years after the due date are barred. History (1971, c. 77, s. 2; 1983 (Reg. Sess., 1984), c. 1097, s. 9; 1987, c. 557, s. 7; c. 832, s. 4; 1989, c. 692, s. 3.7; 1991, c. 689, s. 316; 1996, 2nd Ex. Sess., c. 13, s. 1.3; 1998-98, s. 30.1; 1998-171, s. 9; 2001-347, s. 2.15; 2001-414, s. 29; 2001-424, s. 34.16(b); 2001-430, s. 13; 2001-487, s. 67(e); 2002-16, s. 12; 2002-159, s. 61; 2005-276, s. 33.23; 2006-66, s. 7.20(a); 2006-162, s. 32; 2007-244, s. 6; 2007-368, s. 2; 2008-107, s. 28.12(c); 2010-166, s. 3.8; 2011-330, s. 45; 2013-316, ss. 3.1(c), 3.4(c), (d); 2013-414, s. 49(b); 2014-3, ss. 6.1(i), 8.2(b); 2015-259, s. 4.2(f); 2016-5, s. 3.8(b); 2016-94, s. 38.5(n); 2017-204, s. 2.9(c); 2019-169, s. 3.3(t).) Editor's Note. - Session Laws 2013-316, s. 3.1(d), made the amendments to subsection (a) by Session Laws 2013-316, s. 3.1(c), applicable to sales made on or after January 1, 2014. Session Laws 2013-316, s. 3.4(e), made the repeal of subdivision (a)(5b) and the amendment to subsection (b) by Session Laws 2013-316, s. 3.4(c), applicable to purchases made on or after July 1, 2014. Session Laws 2013-316, s. 9(a), provides: "This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this act before the effective date of its amendment or repeal; nor does it affect the right to any refund or credit of a tax that accrued under the amended or repealed statute before the effective date of its amendment or repeal." Section 105-164.13C, referred to in subsection (b), was repealed by Session Laws 2013-316, s. 3.4(a), effective July 1, 2014. Session Laws 2015-259, s. 4.2(g), made the amendment to subdivision (a)(1) of this section by Session Laws 2015-259, s. 4.2(f), applicable to sales made on or after October 1, 2015. Session Laws 2016-94, s. 38.5(q) made the amendments to this section by Session Laws 2016-94, s. 38.5(n), applicable to purchases of repair, maintenance, and installation services purchased on or after July 1, 2016. Session Laws 2016-94, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2016.'" Session Laws 2016-94, s. 39.7, is a severability clause. Session Laws 2017-204, s. 7.1, is a severability clause. Effect of Amendments. - Session Laws 2005-276, s. 33.23, effective January 1, 2006, added subdivision (a)(7). Session Laws 2006-66, s. 7.20(a), effective July 1, 2005, and applicable to sales made on or after that date, in subsection (b), inserted the exception at the beginning of the second sentence and added the last five sentences. Session Laws 2006-162, s. 32, effective January 1, 2007, substituted "electricity, telecommunications service, and ancillary service" for "electricity and telecommunications service" at the end of the third sentence in subsection (b). Session Laws 2007-244, s. 6, effective October 1, 2007, added subdivision (a)(5a). Session Laws 2007-368, s. 2, effective October 1, 2007, and applicable to sales made on or after that date, added subdivision (a)(5b). Session Laws 2008-107, s. 28.12(c), effective July 16, 2008, and applicable to sales made on or after that date, substituted "tax holidays contained in G.S. 105-164.13 C and G.S. 105-164.13 D" for "tax holiday contained in G.S. 105-164.13C" in the first sentence of subsection (b). Session Laws 2010-166, s. 3.8, effective July 1, 2010, inserted "through G.S. 105-164.14 B" in the first sentence of subsection (b). Session Laws 2011-330, s. 45, effective June 27, 2011, rewrote subsection (a). Session Laws 2013-316, s. 3.1(c), effective January 1, 2014, added "except the tax does not apply to the sales price of a manufactured home or a modular home" at the end of subdivision (a)(1). For applicability, see editor's note. Session Laws 2013-316, s. 3.4(c), (d), effective July 1, 2014, deleted subdivision (a)(5b); and in subsection (b), deleted "the State sales and use tax holidays contained in G.S. 105-164.13 C and G.S. 105-164.13 D, and the State refund provisions contained in G.S. 105-164.14 through G.S. 105-164.14 B" following "G.S. 105-164.13," in the first sentence, added the present second and third sentences and redesignated the remainder as the present second paragraph; in the second paragraph, deleted the former fourth sentence, and substituted "in the same time and manner as provided in G.S. 105-164.14" for "within six months after the end of the entity's fiscal year." For applicability, see editor's note. Session Laws 2013-414, s. 49(b), effective August 23, 2013, deleted the former first sentence in subsection (c), which read: "The local sales tax authorized to be imposed and levied under this Article applies to taxable transactions by retailers who place of business is located within the taxing county." Session Laws 2014-3, s. 6.1(i), effective October 1, 2014, added the present third sentence in the first paragraph of subsection (b). See Editor's note for applicability. Session Laws 2014-3, s. 8.2(b), effective July 1, 2014, in the second paragraph of subsection (b), deleted "other than electricity, telecommunications service, and ancillary service" at the end of the second sentence, inserted the present third-to-last sentence, and substituted "G.S. 105-164.14(c)" for "G.S. 105-164.14" in the next-to-last sentence. See Editor's note for applicability. Session Laws 2015-259, s. 4.2(f), effective October 1, 2015, substituted "an item taxable under G.S. 105-164.4(a) (1a)" for "a manufactured home or a modular home" at the end of subdivision (a)(1). For applicability, see Editor's note. Session Laws 2016-5, s. 3.8(b), effective May 11, 2016, added subdivision (a)(8). Session Laws 2016-94, s. 38.5(n), effective July 1, 2016, inserted "and G.S. 105-164.27 A" in the first sentence of the first paragraph of subsection (b). See editor's note for applicability. Session Laws 2017-204, s. 2.9(c), effective August 11, 2017, in subsection (b), in the first paragraph, substituted "Article 5 of Subchapter I of this Chapter, except for the exemption for food in G.S. 105-164.13 B" for "G.S. 105-164.13 and G.S. 105-164.27 A," "and G.S. 105-164.14 A" for "through G.S. 105-164.14 B" in the first sentence, and "the State's fiscal year" for "a fiscal year" in the last sentence, in the second paragraph, substituted "as part of a real property contract for real property" for "on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure" and "a capital improvement" for "being erected, altered, or repaired"; and substituted "Article 5 of Subchapter I of this Chapter" for "G.S. 105-164.4B" in subsection (c). Session Laws 2019-169, s. 3.3(t), effective July 26, 2019, substituted "items" for "tangible personal property and services" in the second sentence of the second paragraph of subsection (b). Legal Periodicals. - For survey of 1978 law on taxation, see 57 N.C.L. Rev. 1142 (1979).