Lease or Rental of Tangible Personal Property

What Sales and Use Tax is Due on the 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.

Lease or Rental of a Motor Vehicle

A motor vehicle lease and subscription tax applies to the gross receipts derived from a short-term lease or rental, a long-term lease or rental, and a vehicle subscription. The tax rate depends on the type of rental or subscription.

Refer to the motor vehicle lease and subscription tax overview web page for important information regarding tax rates, definitions, registration, and forms.

How to File and Pay Tax Due on the Lease or Rental of Tangible Personal 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.

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