§ 105-164.27A. Direct pay permit. - North Carolina Statutes

§ 105‑164.27A.  Directpay permit.

(a)        General. – Ageneral direct pay permit authorizes its holder to purchase any tangiblepersonal property, digital property, or service without paying tax to theseller and authorizes the seller to not collect any tax on a sale to the permitholder. A person who purchases an item under a direct pay permit issued underthis subsection is liable for use tax due on the purchase. The tax is payablewhen the property is placed in use or the service is received. A direct pay permitissued under this subsection does not apply to taxes imposed under G.S. 105‑164.4on electricity.

A person who purchases an itemwhose tax status cannot be determined at the time of the purchase because ofone of the reasons listed below may apply to the Secretary for a general directpay permit:

(1)        The place ofbusiness where the item will be used is not known at the time of the purchaseand a different tax consequence applies depending on where the item is used.

(2)        The manner in whichthe item will be used is not known at the time of the purchase and one or moreof the potential uses is taxable but others are not taxable.

(a1)      Direct Mail. – Aperson who purchases direct mail may apply to the Secretary for a direct paypermit for the purchase of direct mail. A direct pay permit issued for directmail does not apply to any purchase other than the purchase of direct mail.

(b)        TelecommunicationsService. – A direct pay permit for telecommunications service authorizes itsholder to purchase telecommunications service and ancillary service withoutpaying tax to the seller and authorizes the seller to not collect any tax on asale to the permit holder. A person who purchases these services under a directpay permit must file a return and pay the tax due monthly to the Secretary. Adirect pay permit issued under this subsection does not apply to any tax otherthan the tax on telecommunications service and ancillary service.

A call center that purchasestelecommunications service that originates outside this State and terminates inthis State may apply to the Secretary for a direct pay permit fortelecommunications service and ancillary service. A call center is a businessthat is primarily engaged in providing support services to customers bytelephone to support products or services of the business. A business isprimarily engaged in providing support services by telephone if at least sixtypercent (60%) of its calls are incoming.

(c)        Application. – Anapplication for a direct pay permit must be made on a form provided by theSecretary and contain the information required by the Secretary. The Secretarymay grant the application if the Secretary finds that the applicant complieswith the sales and use tax laws and that the applicant's compliance burden willbe greatly reduced by use of the permit.

(d)        Revocation. – Adirect pay permit is valid until the holder returns it to the Secretary or theSecretary revokes it. The Secretary may revoke a direct pay permit if theholder of the permit does not file a sales and use tax return on time, does notpay sales and use tax on time, or otherwise fails to comply with the sales anduse tax laws.  (2000‑120,s. 1; 2001‑414, s. 20; 2001‑430, s. 9; 2002‑72, s. 18; 2003‑284,s. 45.9; 2003‑416, s. 16(b); 2006‑33, s. 7; 2009‑451, s.27A.3(q).)