Each year the state of North Carolina honors a sales tax holiday for back-to-school items. This holiday is observed between 12:01 on the first Friday of August and ends at 11:59 PM on the following Sunday. These three days offer shoppers the opportunity to save money on many back-to-school essentials and other items. In 2009, the sales tax holiday will run from August 7th through August 9th.
Items Exempt from Sales Tax During the Sales Tax Holiday
Numerous items are exempt for state and local sales tax during the sales tax holiday. Not having to pay theses taxes can make the task of shopping a little more rewarding for the budget-conscious consumer. Examples of items that can be purchased tax-free are as follows:
- Clothing with a sales price of $100 or less per item
- Sport or recreational equipment with a sales price of $50 or less per item
- School supplies with a sales price of $100 or less per item
- Computers with a sales price of $3,500 or less per item
Note that the exemption is not allowed for items that are purchased for use in a trade or business. For more detail and examples on the types of clothing, recreational equipment, school supplies, and computers that are exempt, please refer to North Carolina Sales and Use Tax Technical Bulletin 34-24. Also provided in this guidance are answers to frequently asked questions about the sales tax holiday as summarized below.
Participating Retailers
What types of stores participate in the North Carolina sales Tax holiday? All retailers must legally participate in the August sales tax holiday and not charge tax on eligible items.
Layaway
Are items purchased on layaway eligible for the sales tax exemption? Yes. Eligible items purchased that were placed on layaway prior to the August sales tax holiday are exempt if the final payment is made during the tax-free period. Additionally, the sale of eligible items under a layaway plan are exempt from sales tax if the buyer chooses an item and the store accepts the order during the sales tax holiday, even if the item is delivered after the holiday period.
Rain Checks
Are goods purchased using rain checks eligible for the sales tax exemption? Yes, but only if the eligible item is delivered during the sales tax holiday period.
Refunds
How does a buyer get a refund of sales tax if the store charged the wrong tax? If a retailer charges the wrong sales tax, a buyer must return to the retailer with a copy of the receipt to obtain a refund.
Internet, Mail Order, and Telephone Purchases
Do purchases made via the Internet qualify to be exempt from sales tax? Yes. In fact sales made via the Internet, by mail order, telephone, or at other non-storefront locations qualify for the exemption for eligible items. To qualify, the buyer must order and pay for the item during the sales tax period and the retailer must accept the order and take action to fill the order for immediate delivery.
Current North Carolina Sales Tax Rates
Please visit the North Carolina Department of Revenue website for the current sales tax rate.
North Carolina Energy Star Sales Tax Holiday
Each year the state of North Carolina honors a sales tax holiday for Energy Star qualified products. This holiday is observed between 12:01 on the first Friday of November and ends at 11:59 PM the following Sunday. These three days offer shoppers the opportunity to save money on many on eligible Energy Star appliances.
References:
North Carolina Department of Revenue website
North Carolina Sales and Use Tax Bulletin 34-24
North Carolina Sales and Use Tax Bulletin 34-27
The information contained within this article is for general guidance only. As such, it should not be used as a substitute for consulting with professional accounting, tax, legal or other competent advisers.
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