NC Department of Revenue Announces Resolution Program with Internet Retailers

Date:  April 23, 2010

The North Carolina Department of Revenue is collaborating with e-commerce retailers that have operated affiliate programs in the state to resolve issues of tax liability and to promote equal treatment of all businesses in the State.  The Internet Transactions Resolution Program is the result of cooperative discussions between the Department and a number of e-commerce retailers.

“This is about fairness and uniformly collecting taxes due the State from all retailers,” said Secretary Kenneth R. Lay.  “Small businesses, the brick and mortar operations, are at a competitive disadvantage when they have to collect sales tax that other businesses do not.”

Research indicates the amount of sales tax North Carolina loses from e-commerce transactions will be $161.8 million in 2010, $190.2 million in 2011 and $213.8 million in 2012.  (Source: University of Tennessee http://cber.bus.utk.edu/ecomm/ecom0409.pdf)

The resolution program offers retailers that have operated an affiliate program in North Carolina a proactive way to resolve their liability to the State.  E-commerce retailers can contact the Department for detailed information about eligibility and participation in the Internet Transactions Resolution Program.

“We have a responsibility to uniformly and fairly administer the tax laws of North Carolina, and are willing to cooperate with Internet retailers to reach an agreement on the collection of sales and use taxes in the State,” Secretary Lay said.
 
Businesses that participate in the program will not be assessed tax, penalties and interest for prior liability in exchange for agreeing to collect sales and use tax in the future.

“Participation in this program benefits the State, e-commerce and traditional retailers,” Secretary Lay added.  “The Department is committed to supporting North Carolina business and facilitating the equitable collection of taxes from all taxpayers both individual and corporate.”



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