Increase in State Sales and Use Tax Rate
The 2009 North Carolina General Assembly has enacted legislation that provides for a temporary additional 1% State sales and use tax effective September 1, 2009 and will expire on July 1, 2011. Senate Bill 202 was ratified by the House of Representatives and the Senate on August 5, 2009 and has been signed by Governor Perdue.
As a result of the additional 1% State rate increase, the combined State and county tax rate will increase to 8.25% in Mecklenburg County, 8% in Alexander, Catawba, Cumberland, Haywood, Martin, Pitt, Sampson, and Surry Counties, and 7.75% in the remaining ninety-one counties.
The combined general rate of tax, which applies 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 1% has been temporarily increased, the combined general rate will increase to 8% in all counties, including Mecklenburg County, until July 1, 2011.
Session Law 2009-575 became law September 10, 2009 and the Law applies to sales beginning September 1, 2009 and ending October 1, 2009. The following is taken from Section 22 of the Session Law: “a retailer is not liable for an overcollection or undercollection of sales tax if the retailer has made a good faith effort to comply with the law and collect the proper amount of tax and has, due to the change under Section 27A.2 of Senate Bill 202, 2009 Regular Session, in the rate of tax imposed under G.S. 105-164.4(a), overcollected or undercollected the amount of sales tax that is due.”
The following resources provide additional information about the State rate increase:
- Important Notice: Sales and Use Tax Rate Change
- Important Notice: Increase In “Combined General Rate” of Tax Revised August 19, 2009
- Important Notice: Additional 1% State Sales and Use Tax Rate Increase Issues
- Application of Additional 1% State Tax to Construction Materials
- Simultaneous Change in State and Local Rates Revised August 6, 2010
- Form E-589E - Affidavit to Exempt Contractors from the Additional 1% State Sales and Use Tax
- Worksheet for Completing Form E-500, Sales and Use Tax Return, for Quarter Ending September 30, 2009
- Worksheet for Completing Form E-500, Sales and Use Tax Return, for Month Ending September 30, 2009
- Worksheet for Completing Form E-500E, Utility and Liquor Sales and Use Tax Return, for Quarter Ending September 30, 2009
- Worksheet for Completing Form E-500E, Utility and Liquor Sales and Use Tax Return, for Month Ending September 30, 2009
- Form E-502P - 7.75% Combined State and Local Sales and Use Tax Chart
- Form E-502M - 8% Combined State and Local Sales and Use Tax Chart
- Form E-502Q - 8.25% Combined State and Local Sales and Use Tax Chart