Permanent Extension of General State Rate of Sales and Use Tax

The 2007 North Carolina General Assembly enacted Session Law 2007-323 that permanently extended the additional 0.25% State sales and use tax. In addition, House Bill 714 was ratified by the House of Representatives and the Senate and was signed by Governor Easley on August 6, 2007. This legislation contains a provision that, for the period August 1, 2007 through August 31, 2007, a retailer who has made a good faith effort to comply with the law and collect the proper amount of tax will not be held liable for an over-collection or under-collection of sales tax due to the extension of the 0.25% State tax.

General State Rate

The additional 0.25% rate, resulting in a total general State rate of 4.25%, was scheduled to expire on June 30, 2007 and was temporarily extended for one month pending resolution of the 2007 Appropriations Act. As a result of the permanent extension of the additional 0.25%, the combined State and county tax rate will remain at 6.75% in all counties except Mecklenburg County, where the combined State and county rate will remain at 7.25%.

Combined General Rate

The combined general rate of tax, which applies only to telecommunications service, ancillary service, video programming, and spirituous liquor other than mixed beverages, is the State’s general rate plus the sum of the rates of local tax authorized for every county in the State.  Therefore, since the additional 0.25% has been permanently extended, the combined general rate will remain at 6.75% in all counties.