NCGS 105-164.29A authorizes the Secretary of Revenue to issue an exemption number to a State agency upon proper application. Occupational licensing boards, as defined in NCGS 93B-1 or an entity listed in NCGS 105-164.14(c) are not State agencies.
Once issued, the exemption number can then be placed on Form E-595E, Streamlined Sales and Use Tax Certificate of Exemption, by the State agency on purchases to exempt:
Items subject to sales and use tax under NCGS 105-164.4, other than electricity, telecommunications service, and ancillary service if the following conditions are met:
- The items are purchased by a State agency for its own use and in accordance with NCGS 105-164.29A.
- The items are purchased pursuant to a valid purchase order issued by a State agency that contains the exemption number of the agency and a description of the property purchased, or the items purchased are paid for with a State-issued check, electronic deposit, credit card, procurement card, or credit account of the State agency.
- For all purchases other than an agency-issued purchase order, the agency must provide to or have on file with the retailer the agency’s exemption number.
State agency exemption numbers may not be used to avoid payment of the general State, applicable local, and applicable transit rates of sales and use taxes by:
- A real property contractor to purchase items for use to fulfill real property contracts entered into with a State agency.
- An employee of a State agency to purchase food, lodging, or other taxable items paid by the employee from their own funds and reimbursed by the agency.
- A person other than the State agency to which an exemption number is issued.
- A person who enters into a contract or agreement with a State agency, to purchase tangible personal property, digital property, or taxable services for use by the person to fulfill a contract or agreement entered into with a State agency.
The exemption from sales and use tax does not apply to the following taxes or service charge; therefore, payment of the following must be paid to the retailer by the State agency as applicable under law:
- Prepared food and beverage taxes levied and administered by various local governments in the State.
- Occupancy taxes levied and administered by various local governments and special districts in the State.
- Highway use taxes paid on the purchase, lease, or rental of motor vehicles.
- State sales taxes levied on electricity, telecommunications services, or ancillary services(except for sales to the NC Department of Transportation).
- Scrap tire disposal tax levied on new tires.
- White goods disposal tax levied on new white goods.
- Dry-cleaning solvent tax levied on dry-cleaning solvent purchased by a dry-cleaning facility.
- Solid waste disposal tax levied on the disposal of municipal solid waste and construction debris.
- Other states' sales and use tax paid to those states.
- 911 service charge levied on the sale of prepaid wireless telecommunications service.
Technical Publications for State Agencies
Refer to the Sales and Use Tax Bulletin for Government - State, Local, Etc.