§ 105-164.4. Tax imposed on retailers. - North Carolina Statutes

Part 2. Taxes Levied.

§ 105‑164.4.  Taximposed on retailers.

(a)        (Effective untilJuly 1, 2011) A privilege tax is imposed on a retailer at the followingpercentage rates of the retailer's net taxable sales or gross receipts, asappropriate. The general rate of tax is five and three‑quarters percent(5.75%).

(a)        (Effective July1, 2011) A privilege tax is imposed on a retailer at the followingpercentage rates of the retailer's net taxable sales or gross receipts, asappropriate. The general rate of tax is four and three‑quarters percent(4.75%).

(1)        The general rate oftax applies to the sales price of each item or article of tangible personalproperty that is sold at retail and is not subject to tax under anothersubdivision in this section.

(1a)      The rate of twopercent (2%) applies to the sales price of each manufactured home sold atretail, including all accessories attached to the manufactured home when it isdelivered to the purchaser. The maximum tax is three hundred dollars ($300.00)per article. Each section of a manufactured home that is transported separatelyto the site where it is to be erected is a separate article.

(1b)      The rate of threepercent (3%) applies to the sales price of each aircraft or boat sold atretail, including all accessories attached to the item when it is delivered tothe purchaser. The maximum tax is one thousand five hundred dollars ($1,500)per article.

(1c), (1d) and (1e) Repealed bySession Laws 2005‑276, s. 33.4(b), effective January 1, 2006.

(1f)       The rate of two andeighty‑three‑hundredths percent (2.83%) applies to the sales priceof electricity that is measured by a separate meter or another separate deviceand sold to a commercial laundry or to a pressing and dry‑cleaningestablishment for use in machinery used in the direct performance of thelaundering or the pressing and cleaning service.

a.         Repealed by SessionLaws 2007‑397, s. 10(b), effective October 1, 2007, and applicable tosales occurring on or after that date.

b.         Repealed by SessionLaws 2006‑66, s. 24.19(a), effective July 1, 2007, and applicable tosales made on or after that date.

c.         Repealed by SessionLaws 2007‑397, s. 10(b), effective October 1, 2007, and applicable tosales occurring on or after that date.

(1g)      Repealed by SessionLaws 2004‑110, s. 6.1, effective October 1, 2004, and applicable to salesof electricity made on or after that date.

(1h)      Expired pursuant toSession Laws 2004‑110, s. 6.4, effective for sales made on or afterOctober 1, 2007.

(1i)       Repealed by SessionLaws 2007‑397, s. 10(a), effective October 1, 2007, and applicable tosales occurring on or after that date.

(1j)       (Repealedeffective July 1, 2010 – see notes) The rate of eight‑tenths percent(.8%) applies to the sales price of electricity described in this subdivisionand measured by a separate meter or another separate device:

a.         Sales of electricityto manufacturing industries and manufacturing plants for use in connection withthe operation of the industries and plants.

b.         Sales of electricityto farmers to be used by them for any farming purposes other than preparingfood, heating dwellings, and other household purposes.

(2)        The applicablepercentage rate applies to the gross receipts derived from the lease or rentalof tangible personal property by a person who is engaged in the business ofleasing or renting tangible personal property, or is a retailer and leases orrents property of the type sold by the retailer. The applicable percentage rateis the rate and the maximum tax, if any, that applies to a sale of the propertythat is leased or rented. A person who leases or rents property shall alsocollect the tax imposed by this section on the separate retail sale of theproperty.

(3)        Operators of hotels,motels, tourist homes, tourist camps, and similar type businesses and personswho rent private residences and cottages to transients are considered retailersunder this Article. A tax at the general rate of tax is levied on the grossreceipts derived by these retailers from the rental of any rooms, lodgings, oraccommodations furnished to transients for a consideration. This tax does notapply to any private residence or cottage that is rented for less than 15 daysin a calendar year or to any room, lodging, or accommodation supplied to thesame person for a period of 90 or more continuous days.

            Asused in this subdivision, the term "persons who rent to transients"means (i) owners of private residences and cottages who rent to transients and(ii) rental agents, including "real estate brokers" as defined inG.S. 93A‑2, who rent private residences and cottages to transients onbehalf of the owners. If a rental agent is liable for the tax imposed by thissubdivision, the owner is not liable.

(4)        Every person engagedin the business of operating a dry cleaning, pressing, or hat‑blockingestablishment, a laundry, or any similar business, engaged in the business ofrenting clean linen or towels or wearing apparel, or any similar business, orengaged in the business of soliciting cleaning, pressing, hat blocking,laundering or linen rental business for any of these businesses, is considereda retailer under this Article. A tax at the general rate of tax is levied onthe gross receipts derived by these retailers from services rendered inengaging in any of the occupations or businesses named in this subdivision. Thetax imposed by this subdivision does not apply to receipts derived from coin,token, or card‑operated washing machines, extractors, and dryers. The taximposed by this subdivision does not apply to gross receipts derived from servicesperformed for resale by a retailer that pays the tax on the total grossreceipts derived from the services.

(4a)      The rate of threepercent (3%) applies to the gross receipts derived from sales of electricity,other than sales of electricity subject to tax under another subdivision inthis section. A person who sells electricity is considered a retailer underthis Article.

(4b)      A person who sellstangible personal property at a specialty market, other than the person's ownhousehold personal property, is considered a retailer under this Article. A taxat the general rate of tax is levied on the sales price of each article sold bythe retailer at the specialty market. The term "specialty market" hasthe same meaning as defined in G.S. 66‑250.

(4c)      The combined generalrate applies to the gross receipts derived from providing telecommunicationsservice and ancillary service. A person who provides telecommunications serviceor ancillary service is considered a retailer under this Article. These servicesare taxed in accordance with G.S. 105‑164.4C.

(4d)      The sale or rechargeof prepaid telephone calling service is taxable at the general rate of tax. Thetax applies regardless of whether tangible personal property, such as a card ora telephone, is transferred. The tax applies to a service that is sold inconjunction with prepaid wireless calling service. Prepaid telephone callingservice is taxable at the point of sale instead of at the point of use and issourced in accordance with G.S. 105‑164.4B. Prepaid telephone callingservice taxed under this subdivision is not subject to tax as atelecommunications service.

(5)        Repealed by SessionLaws 1998‑212, s. 29A.1(a), effective May 1, 1999.

(6)        The combined generalrate applies to the gross receipts derived from providing video programming toa subscriber in this State. A cable service provider, a direct‑to‑homesatellite service provider, and any other person engaged in the business ofproviding video programming is considered a retailer under this Article.

(6a)      The general rateapplies to the gross receipts derived from providing satellite digital audioradio service. For services received by a mobile or portable station, theservice is sourced to the subscriber's business or home address. A personengaged in the business of providing satellite digital audio radio service is aretailer under this Article.

(6b)      The general rateapplies to the digital property that is listed in this subdivision, isdelivered or accessed electronically, is not considered tangible personalproperty, and would be taxable under this Article if sold in a tangible medium.The tax applies regardless of whether the purchaser of the item has a right touse it permanently or to use it without making continued payments. The tax doesnot apply to a service that is taxed under another subdivision of thissubsection or to an information service. The following property is subject totax under this subdivision:

a.         An audio work.

b.         An audiovisual work.

c.         A book, a magazine,a newspaper, a newsletter, a report, or another publication.

d.         A photograph or agreeting card.

(7)        The combined generalrate applies to the sales price of spirituous liquor other than mixedbeverages. As used in this subdivision, the terms "spirituous liquor"and "mixed beverage" have the meanings provided in G.S. 18B‑101.

(8)        The rate of two andone‑half percent (2.5%) applies to the sales price of each modular homesold at retail, including all accessories attached to the modular home when itis delivered to the purchaser. The sale of a modular home to a modularhomebuilder is considered a retail sale. A person who sells a modular home atretail is allowed a credit against the tax imposed by this subdivision forsales or use tax paid to another state on tangible personal propertyincorporated in the modular home. The retail sale of a modular home occurs whena modular home manufacturer sells a modular home to a modular homebuilder ordirectly to the end user of the modular home.

(b)        The tax levied inthis section shall be collected from the retailer and paid by him at the timeand in the manner as hereinafter provided. Provided, however, that any personengaging or continuing in business as a retailer shall pay the tax required onthe net taxable sales of such business at the rates specified when proper booksare kept showing separately the gross proceeds of taxable and nontaxable salesof tangible personal property in such form as may be accurately andconveniently checked by the Secretary or his duly authorized agent. If such recordsare not kept separately the tax shall be paid as a retailer on the gross salesof business and the exemptions and exclusions provided by this Article shallnot be allowed. The tax levied in this section is in addition to all othertaxes whether levied in the form of excise, license or privilege or othertaxes.

(c)        Certificate ofRegistration. – Before a person may engage in business as a retailer or awholesale merchant, the person must obtain a certificate of registration fromthe Department in accordance with G.S. 105‑164.29.  (1957, c. 1340, s. 5; 1959,c. 1259, s. 5; 1961, c. 826, s. 2; 1963, c. 1169, ss. 3, 11; 1967, c. 1110, s.6; c. 1116; 1969, c. 1075, s. 5; 1971, c. 887, s. 1; 1973, c. 476, s. 193; c.1287, s. 8; 1975, c. 752; 1977, c. 903; 1977, 2nd Sess., c. 1218; 1979, c. 17,s. 1; c. 22; c. 48, s. 1; c. 527, s. 1; c. 801, s. 73; 1981, c. 984, ss. 1, 2;1981 (Reg. Sess., 1982), cc. 1207, 1273; 1983, c. 510; c. 713, ss. 89, 93; c.805, ss. 1, 2; 1983 (Reg. Sess., 1984), c. 1065, ss. 1, 2, 4; c. 1097, ss. 6,13; 1985, c. 704; 1985 (Reg. Sess., 1986), c. 925; c. 1005; 1987, c. 557, ss.4, 5; c. 800, ss. 2, 3; c. 854, s. 1; 1987 (Reg. Sess., 1988), c. 1044, s. 4;1989, c. 692, ss. 3.1, 3.3, 8.4(8); c. 770, s. 74.4; 1989 (Reg. Sess., 1990),c. 813, ss. 14, 15; 1991, c. 598, s. 5; c. 689, s. 311; c. 690, s. 1; 1993, c.372, s. 1; c. 484, s. 2; 1995, c. 17, s. 6; c. 477, s. 1; 1996, 2nd Ex. Sess.,c. 13, ss. 1.1, 9.1, 9.2; 1997‑475, s. 1.1; 1998‑22, s. 5; 1998‑55,ss. 8, 14; 1998‑98, ss. 13.2, 48(a), (b); 1998‑121, ss. 3, 5; 1998‑197, s. 1;1998‑212, s. 29A.1(a); 1999‑337, ss. 29, 30; 1999‑360, s.3(a), (b); 1999‑438, s. 1; 2000‑140, s. 67(a); 2001‑424, ss.34.13(a), 34.17(a), 34.23(b), 34.25(a); 2001‑430, ss. 3, 4, 5; 2001‑476,ss. 17(b)‑(d), (f); 2001‑487, ss. 67(b), 122(a)‑(c); 2002‑16,s. 4; 2003‑284, s. 38.1; 2003‑400, s. 15; 2004‑110, ss. 6.1,6.2, 6.3; 2005‑144, s. 9.1; 2005‑276, ss. 33.1, 33.4(a), 33.4(b);2006‑33, ss. 2, 11; 2006‑66, ss. 24.1(a), (b), (c), 24.19(a), (b);2006‑151, s. 3; 2007‑145, s. 9(a); 2007‑323, ss. 31.2(a),(b), 31.16.3(h), 31.16.4(g); 2007‑397, ss. 10(a)‑(f); 2009‑451,s. 27A.2(b), (e).)