NCGS 105-164.29A authorizes the Secretary of Revenue to issue an exemption number to a State agency. This exemption number can then be placed on Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption, by a State agency to purchase tangible personal property exempt from sales or use tax. See Sales and Use Tax Technical Bulletin Section 18 for more information.
NCGS 105-164.13(52) sets out the conditions that must be met for a purchase by a State agency to be exempt through the use of a State agency exemption number. For a purchase to be exempt, all of the following conditions must be met:
- The items are purchased by a State agency for its own use and in accordance with NCGS 105-164.29A.
- The items are purchased pursuant to a valid purchase order issued by a State agency that contains the exemption number of the agency and a description of the property purchased, or the items purchased are paid for with a State-issued check, electronic deposit, credit card, procurement card, or credit account of the State agency.
- For all purchases other than an agency-issued purchase order, the agency must provide to or have on file with the retailer the agency’s exemption number.
The exemption number cannot be used by any of the following:
- A real property contractor to purchase items for use to fulfill real property contracts entered into with a State agency.
- An employee of a State agency to purchase food, lodging, or other taxable items paid by the employee from their own funds and reimbursed by the agency.
- A person other than the State agency to which an exemption number is issued.
- A person who enters into a contract or agreement with a State agency, to purchase tangible personal property, digital property, or taxable services for use by the person to fulfill a contract or agreement entered into with a State agency.
A State agency exemption number does not apply to the following taxes and these taxes must be paid to the vendor by the State agency:
- Prepared food and beverage taxes levied and administered by various local governments in the State.
- Occupancy taxes levied and administered by various local governments and special districts in the State.
- Highway use taxes paid on the purchase, lease, or rental of motor vehicles.
- State sales taxes levied on electricity, telecommunications services, or ancillary services(except for sales to the NC Department of Transportation).
- 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.
- 911 service charge levied on the sale of prepaid wireless telecommunications service.
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