North and South Carolina Revenue Departments Join Forces
The North Carolina and South Carolina revenue departments will join
forces next month to confront a growing problem – payment of
the sales tax for all-terrain vehicles and watercraft purchased from
retailers along the border.
Both revenue agencies have found that frequently sales tax is not
charged on these purchases because according to the retailer’s
records, the delivery of the vehicle or boat was made to a customer
in the neighboring state. State law requires that a taxpayer who buys
items in a state that doesn’t charge sales tax must report and
pay the use tax. A line for the use tax is included on the North Carolina
individual income tax form.
Both states are taking several steps to make sure that sales tax
laws regarding these transactions are properly applied, such as verifying
the delivery location of the equipment to the customer. Often, customers
say the dealership was the delivery location for their purchase and,
in some cases, a customer’s invoice will show that tax was paid
to the dealer.
North and South Carolina are members of the Southeastern Association
of Tax Administrators (SEATA), an organization that allows member
states to share tax information specified by tax exchange agreements
and to cooperate on various efforts.
The North Carolina Department of Revenue will also focus on the misuse
of state agricultural certificates, form E-599, by customers who attempt
to purchase all-terrain vehicles at the sales tax rate of one percent.
However, this tax rate is available only for purchases of farm machinery
and does not generally include ATVs. Department of Revenue auditors
have found 1,400 cases involving misuse of the certificate and recovered
approximately $2 million in taxes during the current fiscal year.
(For more information about the South Carolina sales and use
tax, see the S. C. Department of Revenue website at www.sctax.org.)
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Last modified on:
10/31/07 03:43:48 PM