Lease or Rental of Tangible Personal Property

The gross receipts or gross proceeds derived from or the total amount agreed to be paid for the lease or rental, within North Carolina, of all kinds and types of tangible personal property not specifically exempt by statute are subject to sales and use tax at the same rate and maximum tax that is applicable to the retail sale of such property. For information on the applicable rate of tax, refer to sales and use tax rates web page. The tax is due and payable at the time the lessor bills the lessee for rent whether such billing is for the lump sum rental or on a monthly or other periodic basis. A person who leases or rents tangible personal property shall also collect tax on the separate retail sale of the property. Gross receipts derived from the lease or rental of tangible personal property and the sales and use tax thereon are generally reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.

A motor vehicle lease and subscription tax applies to the gross receipts derived from a limited possession commitment.  The motor vehicle lease and rental tax is reported to the Department on Form E-500F, Motor Vehicle Lease and SubscriptionTax Return.  Learn more about the motor vehicle lease and subscription tax.

Additional Information for the Lease or Rental of Tangible Personal Property