Video Programming Service
What Sales and Use Tax is Due?
Gross receipts derived from providing video programming to a subscriber in North Carolina are subject to the 7.00% combined general rate of sales and use tax. Video programming includes but is not limited to cable service and direct-to-home satellite service.
Gross Receipts Subject to Tax
The gross receipts derived from the sale of video programming is the total amount or consideration for which video programming is sold. The gross receipts must be valued in money, whether paid in money or otherwise.
Charges or Fees that are Part of the Gross Receipts Subject to Tax
The gross receipts include all charges for items provided in the production and delivery of video programming to customers, notwithstanding that some charges may be billed separately.
Examples of charges included in the gross receipts include charges for the following:
- Cable service.
- Direct-to-home satellite service.
- Basic cable/satellite service.
- Deluxe cable/satellite service.
- Premium cable/satellite service.
- Pay-per-view cable/satellite service.
- Repair, maintenance, and installation services.
- Contribution in aid of construction.
- Installation charges that are part of the sales price of providing video programming.
Items that are Not Part of the Gross Receipts Derived from Video Programming but may be Subject to a Different Rate of Tax
Certain charges or services provided by a retailer of video programming that are not part of the gross receipts derived from video programming may be subject to a different rate of tax. Examples of charges or services subject to the general state, applicable local, and applicable transit rates of sales and use tax include, but are not limited to:
- Converter rentals.
- VOIP equipment sales and rentals.
- Internet equipment sales and rentals.
- Service contracts.
Charges or Fees that are not Subject to Tax
Certain charges or fees by a retailer of video programming may not be subject to sales and use tax when separately stated on the invoice or similar billing document given to the purchaser at the time of sale. The charges or fees not subject to sales and use tax are:
- Franchise fees.
- Advertising.
- Commission income.
- Late fees.
- Returned check charges.
- Tower/satellite rental income.
- Program launch support.
How to File and Pay?
The gross receipts derived from providing video programming and the 7.00% combined general rate of sales and use tax thereon are to be reported to the Department on Form E-500E, Combined General Rate Sales and Use Tax Return.
The gross receipts derived from the sale of a service contract or the rental of tangible personal 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 85 - Video Programming, Satellite Digital Audio Radio Service, and Other Related Items