Effective July 1, 2018, Article 5F of Chapter 105 of the North Carolina General Statutes will be repealed for sales and purchases occurring on or after that date. Consequently, sales and purchases on or after July 1, 2018, of qualifying mill machinery, mill machinery parts or accessories, and other qualifying items for specific industries will no longer be subject to the one percent privilege tax.  However, these purchases will continue to be subject to sales and use tax exemptions pursuant to N.C. Gen. Stat. §§ 105-164.13(5e) – (5m).

Depending upon the existing filing frequency for the associated account number, a final Form E-500J, Machinery and Equipment Tax Return, should be filed for the month or quarter ending June 30, 2018. Since the Department of Revenue will be closing all active Certain Machinery and Equipment accounts as of June 30, 2018 in its system, a Form NC-BN, Out-of-Business Notification will not be required for submission with a final return for the period ending on June 30, 2018.

Furthermore, taxpayers who made an overpayment of the 1% privilege tax for a period ending on or before June 30, 2018, may file Form E-588J, Claim for Refund Certain Machinery and Equipment Tax. Taxpayers should keep in mind generally, the statute of limitations for obtaining a refund of an overpayment is the later of three years after the due date of the return or two years after payment of the tax. A qualified tax attorney can assist with the execution of the application and potential questions or concerns that may arise in the process.

Jeanette Moffa is an attorney who concentrates on state and local taxes at Moffa, Sutton, & Donnini, P.A. She is an executive council member of the American Bar Association Tax Section State and Local Tax Committee and the Florida Bar Tax Section. Ms. Moffa is an author of both the CCH’s Expert Treatise Library: Sales and Use Tax as well the ABA’s Sales and Use Tax Deskbook. In addition, her regular columns on state and local tax issues can be found in State Tax Notes and Actionline, a publication from the Florida Bar’s Real Property, Probate, and Trust Law Section. She also serves as assistant editor to the Sales and Use Tax Deskbook and Actionline. Ms. Moffa is a regular speaker at the American Bar Association Tax Section conferences, the Institute of Professionals in Taxation, the Florida Bar Tax Section, the Florida Bar Real Property, Probate, and Trust Law Section, and the FICPA. In her free time, she teaches as an adjunct professor at Broward College.