Sales and Use Tax

Sales and Use Tax

Sales tax in North Carolina is considered a privilege tax on retailers’ net taxable sales or gross receipts from retail sales of tangible personal property, or the lease/rental of such property.  The tax is intended to be passed on to the purchaser of the taxable item and borne by the purchaser rather than the retailer.  It is the responsibility of the retailer to act as the trustee, collect the tax on transactions, and remit the tax to the state.

North Carolina State University is considered the retailer in several areas and must charge sales tax on tangible personal property when these items are sold, remitting the tax to the State when due.   Departments that sell tangible personal property to non-State agencies must collect tax and remit to the North Carolina Department of Revenue using form E-500.

In 2003, North Carolina’s Legislature passed Senate Bill 100 (Session Law 2003-431) [see pg. 1,351]  that exempted the University from paying sales tax on tangible personal property.  This bill was enacted to promote efficiency in State Government by allowing for an exemption rather than a refund.  General Statute § 105-164.13(52) states that the University is exempt as long as all of the following conditions are met:

a)      The items are purchased by a State Agency for its own use.
b)      The items are purchased pursuant to a valid purchase order issued by the 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 for the State agency.
c)       For all purchases other than by an agency-issued purchase order, the agency must provide to or have on file with the retailer the agency’s exemption number.

NC State Sales and Use Tax Guide

Sales Tax Exemption Questions and Answers

NC State University Controller’s Sales Tax Exempt Letter

NC State’s Certificate of Exemption (E-595E)

Tax Exempt Company List

Some companies provide their own tax-exempt number.  In order to process a tax-exempt sale, NC State needs to provide both the University tax-exempt number (400021), and the specific tax-exempt number of the business.  The list of vendors that have their own tax-exempt number are below:

Food Lion
Lowe’s Hardware:  078600007 (updated)
Staples:  3903338600
Wal-Mart:  1033560
Home Depot:  1204023320
Dollar General Sales Tax Exemption
Office Depot/Office Max Tax Exemption

State’s Sales and Use Tax Exemption Certificates

NC State University has the following states’ exemptions for sales and use tax:

STATE	State Exemption Certificate	General Purchases & Services	Lodging (Occupancy Tax)	Destination vs. Origin	Expiration Date
Alabama	Certificate	Exempt	Taxable	Destination	10/31/2024
Alaska	N/A	No State Sales Tax	Taxable	No State Sales Tax	N/A
Arizona	No Exemption	Taxable	Taxable	Origin
Arkansas	No Exemption	Taxable	Taxable	Destination
California*	No Exemption	Taxable	Taxable	Origin*
Colorado	Directive	Exempt	Taxable	Destination	N/A
Connecticut	No Exemption	Taxable	Taxable	Destination
Delaware	N/A	No State Sales Tax	Taxable	No State Sales Tax	N/A
Florida	Certificate	Exempt	Taxable	Destination	09/30/2026
Georgia	No Exemption	Taxable	Taxable	Destination
Hawaii	N/A	Taxable^	Taxable	Destination^	N/A
Idaho	No Exemption	Taxable	Taxable	Destination
Illinois	Certificate	Exempt	Taxable	Origin	01/01/2026
Indiana	No Exemption	Taxable	Taxable	Destination
Iowa	No Exemption	Taxable	Taxable	Destination
Kansas	Certificate	Exempt	Taxable	Destination	10/01/2028
Kentucky	Certificate	Exempt	Taxable	Destination	N/A
Louisiana	No Exemption	Taxable	Taxable	Destination
Maine	Certificate	Exempt	Taxable	Destination	N/A
Maryland	No Exemption	Taxable	Taxable	Destination
Massachusetts	No Exemption	Taxable	Taxable	Destination
Michigan	No Exemption	Taxable	Taxable	Destination
Minnesota	Certificate	Exempt	Taxable	Destination
Mississippi	No Exemption	Taxable	Taxable	Origin
Missouri	No Exemption	Taxable	Taxable	Origin
Montana	N/A	No State Sales Tax	Taxable	No State Sales Tax	N/A
Nebraska	No Exemption	Taxable	Taxable	Destination
Nevada	No Exemption	Taxable	Taxable	Destination
New Hampshire	N/A	No State Sales Tax	Taxable	No State Sales Tax	N/A
New Jersey**	No Exemption	Taxable	Taxable	Destination
New Mexico	No Exemption	Taxable	Taxable	Destination
New York**	No Exemption	Taxable	Taxable	Destination
North Carolina	Certificate	Exempt	Taxable	Destination
North Dakota	No Exemption	Taxable	Taxable	Destination
Ohio	Certificate	Exempt	Taxable	Origin
Oklahoma	No Exemption	Taxable	Taxable	Destination
Oregon	N/A	No State Sales Tax	Taxable	No State Sales Tax	N/A
Pennsylvania	No Exemption	Taxable	Taxable	Origin
Rhode Island	No Exemption	Taxable	Taxable	Destination
South Carolina	No Exemption	Taxable	Taxable	Destination
South Dakota	No Exemption	Taxable	Taxable	Destination
Tennessee	No Exemption	Taxable	Taxable	Origin
Texas	Certificate	Exempt	Taxable	Origin	No Expiration Date
Utah	No Exemption	Taxable	Taxable	Origin
Vermont	No Exemption	Taxable	Taxable	Destination
Virginia	No Exemption	Taxable	Taxable	Origin
Washington	No Exemption	Taxable	Taxable	Destination
Washington, D.C.	No Exemption	Taxable	Taxable	Destination
West Virginia***	No Exemption	Taxable	Taxable	Destination
Wisconsin***	No Exemption	Taxable	Taxable	Destination
Wyoming	No Exemption	Taxable	Taxable	Destination

Destination vs. Origin State:

• Origin-based states collect sales tax based on where the seller is located.
• Destination-based states collect sales tax based on where the buyer is located (the destination of the sale).

^ Collects a General Excise Tax on the seller which is allowed to pass along to buyer.
* Modified origin state where state, county, and city taxes are based on the origin, but district taxes are based on the destination.
** Does not provide tax exemptions to other states’ political subdivisions.
*** Only provides exemptions to states that reciprocate sales and use tax exemptions. North Carolina does not reciprocate.