Direct Pay Permit for Sales and Use Taxes on Qualifying Spirituous Liquor
General Information
A direct pay permit for sales and use taxes on qualifying spirituous liquor allows a person to make certain purchases of qualifying spirituous liquor without payment of sales and use tax to sellers. A direct pay permit issued for qualifying spirituous liquor does not apply to the purchase of non-qualifying spirituous liquor or the purchase of any other item.
“Qualifying spirituous liquor” means a single container of spirituous liquor, as defined in G.S. § 18B-101, the purchase price of which is equal to or greater than fifty thousand dollars ($50,000). Examples of a single container of spirituous liquor include:
- A single 0.75 liter, closed bottle of brandy.
- A single 1.75 liter closed bottle of bourbon.
- A single 700 milliliter closed can of premixed cocktail sold by someone other than a mixed beverage permittee.
The maximum use tax on qualifying spirituous liquor is one thousand dollars ($1,000). For a purchase to be subject to the maximum tax, the purchaser must obtain a Qualifying Spirituous Liquor Direct Pay Permit or elect to have the seller collect and remit the maximum use tax.
Election to Have Retailer to Collect and Remit Use Tax
In lieu of obtaining a direct pay permit and making the purchase under the permit, a purchaser may elect to have the seller collect and remit the maximum use tax for qualifying spirituous liquor due on behalf of the purchaser. Where the purchaser elects for the seller to collect and remit the tax, the seller must charge its customers the maximum tax of one thousand dollars ($1,000) for each sale of qualifying spiritous liquor and provide its purchasers an invoice that shows the tax collected on the purchase.
A business or person who does not elect to have the seller collect and remit the tax due on behalf of the purchaser and applies for and is issued a direct pay permit for sales and use taxes for qualifying spirituous liquor, must file applicable tax returns, remit the tax due, and maintain records that clearly reflect the tax liability.
Who Qualifies?
A person who plans to make a purchase of qualifying spirituous liquor qualifies for the direct pay permit or the election to have the retailer collect and remit the use tax.
Application Process
A person may request permission from the Secretary of Revenue to discharge its sales and use tax liability on qualifying spirituous liquor directly to the Department by completing Form E-595SL, Application for Direct Pay Permit for Qualifying Spirituous Liquor. The authorization by the Secretary is conditioned upon full compliance with the provisions of the Sales and Use Tax Law and timely payment of all taxes due.