§ 105-164.42I. Contract with certified service provider and effect of contract. - North Carolina Statutes

§ 105‑164.42I.  Contractwith certified service provider and effect of contract.

(a)        Certification. –The Secretary may certify an entity as a certified service provider if theentity meets all of the following requirements:

(1)        The entity uses acertified automated system.

(2)        The entity hasagreed to update its program upon notification by the Secretary.

(3)        The entityintegrates its certified automated system with the system of a seller for whomthe entity collects tax so that the tax due on a sale is determined at the timeof the sale.

(4)        The entity remitsthe taxes it collects at the time and in the manner specified by the Secretary.

(5)        The entity agrees tofile sales and use tax returns on behalf of the sellers for whom it collectstax.

(6)        The entity entersinto a contract with the Secretary and agrees to comply with all the conditionsof the contract.

(b)        Contract. – TheSecretary may contract with a certified service provider for the collection andremittance of sales and use taxes. A certified service provider must file withthe Secretary a bond or an irrevocable letter of credit in the amount set bythe Secretary. A bond must be conditioned upon compliance with the contract, bepayable to the State, and be in the form required by the Secretary. The amounta certified service provider charges under the contract is a cost of collectingthe tax and is payable from the amount collected.

(c)        Liability. – Aseller may contract with a certified service provider to collect and remitsales and use taxes payable to the State on sales made by the seller. Acertified service provider with whom a seller contracts is the agent of theseller. As the seller's agent, the certified service provider, rather than theseller, is liable for sales and use taxes due this State on all salestransactions the certified service provider processes for the seller unless theseller misrepresents the type of products it sells or commits fraud. A sellerthat misrepresents the type of products it sells or commits fraud is liable fortaxes not collected as a result of the misrepresentation or fraud.

(d)        Audit and Review. –In the absence of misrepresentation or fraud, a seller that contracts with acertified service provider is not subject to audit on the transactionsprocessed by the certified service provider. A seller is subject to audit fortransactions not processed by the certified service provider. The State mayperform a system check of a seller and review a seller's procedures todetermine if the certified service provider's system is functioning properlyand the extent to which the seller's transactions are being processed by thecertified service provider. A certified service provider is subject to audit. (2000‑120, s. 2; 2001‑347,ss. 1.1, 1.3; 2005‑276, s. 33.31.)