Certain Digital Property
What is Certain Digital Property?
Certain digital property includes the items listed below if transferred electronically:
- A digital audio work.
- A digital audiovisual work.
- A digital book.
- A magazine, a newspaper, a newsletter, a report, or another publication.
- A photograph.
- A greeting card.
Certain digital property does not include an information service or an educational service.
An item is transferred electronically if the item is obtained by the purchaser by means other than tangible storage media including being delivered or accessed electronically. Delivered electronically is delivery by download, email, or other method; while accessed electronically is delivery by online access generally accompanied by a password or digital code.
What Sales and Use Tax is Due?
The general state, applicable local, and applicable transit rates of sales and use tax apply to the sales price of certain digital property that is sold at retail. The tax applies regardless of whether the purchaser of the property has the right to use it permanently or to use it without making continued payments.
The sale at retail or the use, storage, or consumption in this state of a digital code1 is treated the same as the sale at retail or the use, storage, or consumption in this state of certain digital property for which the digital code relates.
How to File and Pay?
Gross receipts derived from the sale of certain digital property and the sales and use tax thereon are to be reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.
How Do I Find More Resources?
- Sales and Use Tax Bulletin 23 - Digital Property (Certain Digital Property)
- 1
N.C. Gen. Stat. § 105-164.3.