Reporting County and Transit Sales and Use Taxes
If you collect county and/or transit tax for one county only, enter the appropriate amounts in the spaces provided on the return. If you collect county and/or transit tax for more than one county, complete Form E-536, Schedule of County Sales and Use Taxes, and mail with your sales and use tax return or enter the amount per county in the Department's online file and pay application when filing an electronic sales and use tax return.
General Sourcing Provisions
A person engaged in business in this State for sales and use tax purposes is required to collect the county tax for all counties to which product is sourced in accordance with G.S. 105-164.4B. A person must report county and applicable transit taxes for all counties to which property is delivered, shipped, or sourced according to the sourcing provisions in G.S. 105-164.4B.
The following general principles apply in determining where to source the sale of most products and should be used to determine the applicable local and transit rate of tax due on a retail sale. Except as otherwise provided below, a service is sourced where the purchaser can potentially first make use of the service:
- When a purchaser receives a product at a business location of the seller, the sale is sourced to that business location.
- When a purchaser or purchaser’s donee receives a product at a location specified by the purchaser and the location is not a business location of the seller, the sale is sourced to the location where the purchaser or the purchaser’s donee receives the product.
- When (1) and (2) of this section do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller’s business when use of this address does not constitute bad faith.
- When (1), (2), and (3) of this section do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser’s payment instrument, if no other address is available, when use of this address does not constitute bad faith.
- When (1), (2), (3), and (4) of this section do not apply, including the circumstance in which the seller is without sufficient information to apply the rules, the location will be determined based on the following:
- Address from which tangible personal property was shipped,
- Address from which the digital good or the computer software delivered electronically was first available for transmission by the seller, or
- Address from which the service was provided.
Florist Wire Sale
A florist wire sale is sourced to the business location of the florist that takes the order for the sale.
Periodic Rental Payments - Certain Property
Periodic rental payments are sourced in accordance with G.S. 105-164.4B(b).
Taxable digital property is sourced to the county where the purchaser takes possession of the property or makes first use of the property, whichever comes first.
An admission charge to an entertainment activity is sourced to the location where admission to the entertainment activity may be gained by a person. When the location where admission may be gained is not known at the time of the receipt of the gross receipts for an admission charge, the sourcing principles in G.S. 105-164.4B(a) apply.
Purchases and sales of advertising and promotional direct mail and other direct mail are sourced in accordance with G.S. 105-164.4E.
The retail sale of a "service contract" by a retailer or on behalf of a retailer by another person to a purchaser at a location in this State is the location where the sale of the "service contract" is sourced provided the purchaser can potentially first make use of the service at the location. If the purchaser of the "service contract" cannot potentially make first use at the location where the "service contract" is sold, the sale is sourced in accordance with G.S. 105-164.4B(3), (4) or (5) based on the hierarchy and available address.
Prepaid Meal Plans
Prepaid meal plans are sourced to the location where the food or prepared food is available to be consumed by the person.
Rental of Accommodations
The rental of an accommodation is sourced to the location of the accommodation.
Renewal of a Service Contract for Prewritten Computer Software
The gross receipts derived from the renewal of a service contract for prewritten software is generally sourced in accordance with the principles in G.S. 105-164.4B(a). However, sourcing the renewal to an address where the purchaser received the underlying prewritten software does not constitute bad faith provided the retailer has not received information from the purchaser that indicates a change in location of the underlying software.