Frequently Asked Questions about University Tax Compliance
Frequently asked questions about the university’s tax status, its tax identification, exemptions numbers, and other general tax issues concerning foreign nationals can be found below.
What is the University’s tax status?
North Carolina State University is an agency of the State of North Carolina and, as such, derives its tax-exempt status in accordance with the constitutional law doctrine of intergovernmental tax immunity. In general, this doctrine exempts state and local governments from federal income taxation in the performance of their essential functions. In addition to this, gifts made for exclusively public purposes to or for the use of government units of a state or possession of the United States, or their political subdivisions, such as the University, are deductible. See IRC Section 170 (c) (1). Below is a link to a letter from the IRS regarding the University’s tax status.
What is the University’s federal tax identification number?
North Carolina State University’s Federal Taxpayer Identification Number is 56-6000756.
What is the University’s State tax exemption number?
North Carolina State University’s State tax exemption number is 400021.
What is the University’s Dun & Bradstreet (DUNS) identification number?
North Carolina State University’s DUNS number is 14-397-6090.
What is the University’s North American Industry Classification System (NAICS) number?
North Carolina State University’s NAICS number is 611310.
Is the University exempt from sales tax?
As a state agency, the University is exempt from North Carolina sales and use tax for qualifying purchases effective July 1, 2004. North Carolina State University’s sales and use tax exemption number is 400021. This number is the University’s authority for purchasing items subject to sales and use tax without payment of tax to vendors. This exemption should only be used for direct purchases.
The following items are not exempt from state sales and use tax:
- Prepared food and beverage taxes levied and administered by various local governments in the State
- Occupancy taxes levied and administered by various local governments in the State
- Highway use taxes paid on the purchase, lease or rental of motor vehicles
- State sales taxes levied on electricity or local, private or toll telecommunications services
- 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 (unless NCSU has an exemption in that state -See Controller’s Sales and Use Tax Page)
- 911 service charge levied on the sale of prepaid wireless telecommunications service.
The university’s tax-exempt certificate can be found on the Tax Office webpage: https://controller.ofa.ncsu.edu/university-tax-compliance/sales-and-use-tax/.
For more frequently asked questions on Sales and Use tax see:
Sales Tax Frequently Asked Questions
What is an occupancy tax? Are we exempt?
Occupancy taxes are levied and administered by various local governments in North Carolina for the privilege of occupying a room or rooms or other living space in a hotel, inn, tourist home, motel or other lodging. NCSU is not exempt from occupancy tax. Rate information can be found at The North Carolina Department of Revenue.
What is the North Carolina 4% withholding tax?
The North Carolina 4% withholding tax is a tax that is levied on:
(1) Personal services in connection with a performance, an entertainment or athletic event, a speech, or the creation of a film, radio, or television program performed in North Carolina by nonresidents
(2) An ITIN holder who performs services in North Carolina for compensation other than wages. An ITIN holder is a person whose taxpayer identification number is an Individual Taxpayer Identification Number (ITIN).
For additional information, see the following pages: Withholding for Personal Services Performed in NC by Nonresidents and Withholding for Services Performed in NC by ITIN Contractors.
What is a nonresident alien for tax purposes?
A nonresident alien for tax purposes is a non-U.S. citizen who does not meet either the lawful permanent residence (”Green Card”) test or the Substantial Presence Test. A nonresident alien files a special tax form, pays tax only on U.S. source income, is subject to special rates, and may qualify for treaty exemptions.
What is a resident alien for tax purposes?
A resident alien for tax purposes is a non-U.S. citizen who meets either the lawful permanent residence (“Green Card”) test or the Substantial Presence Test.
What is the Green Card test?
If an individual is a permanent resident alien (i.e. a green card holder) at any time during the calendar year, he or she will have met the green card test and be treated as a resident alien for tax purposes for that year. A person is a lawful permanent resident of the U.S. if he or she has been given the privilege, according to the immigration laws, of residing permanently in the U.S. as an immigrant. A person generally has this status if the Immigration and Naturalization Service (INS) has issued the person an alien registration card, also known as a “green card”.
What is the Substantial Presence Test?
The substantial presence test is the only method that may be used to determine the tax status of a non-U.S. citizen or non-permanent resident alien. The test is a mathematical calculation of the number of days an individual is present in the U.S. during a period of three calendar years. The most recent days spent in the U.S. are weighted with more importance and days further in the past have less importance to the calculation. There are two parts to the test: the “31-day” test and the “182-day” test.
To meet the substantial presence test, an individual must be physically present in the U.S. for at least:
- 31 days during the current year, and
- 183 days during the 3-year period that includes the current year and the previous two years, counting:
- All of the days an individual was present in the current year, and
- 1/3 of the days an individual was present in the first preceding year, and
- 1/6 of the days an individual was present in the second preceding year.
If the test is met, the person will be treated as a resident alien for tax purposes.
Certain situations allow individuals to exclude days of actual physical presence in the U.S. from the calculation of the substantial presence test. These individuals are considered to be “exempt individuals”. There are four categories of “exempt individuals” as follows:
- Foreign government-related individuals
- Professional athletes
- Students and their dependents present in the U.S. under an F, J, M, or Q visa immigration status for five calendar years
- Teachers and trainees and their dependents present in the U.S. under a J or Q visa immigration status for two of the current and past six calendar years