North Carolina has provided an update to correct the period of time to file a request for review and a written request with the Secretary for consideration to grant a reduction for certain sales and use tax assessments.

The purchase, lease, or rental of linens by a retailer or facilitator of a rental of an accommodation is subject to the general 4.75% state, local (2.00% or 2.25%), and applicable transit (0.50%) rates of sales or use tax on the purchase price at the time of purchase, lease, or rental. Linen purchases, leases, or rentals are subject to sales and use tax if the linens are optional or provided for a fee by the retailer to a person renting an accommodation. A retailer of a rental of accommodation, who has issued a certificate of exemption or otherwise erroneously advised a linen retailer that such purchases, leases, or rentals are exempt from sales and use tax, should provide notice to the linen retailer to begin charging tax.

As provided in Sales and Use Tax Technical Bulletin Section 27, the following are examples of charges or fees that are part of the gross receipts derived from the rental of an accommodation and subject to the general 4.75% state, applicable local (2.00% or 2.25%), and applicable transit (0.50%) rates of sales and use tax no matter if the charge or fee for such is separately stated on the invoice or other documentation provided by the retailer or facilitator: credit card fees, damage fees, early/late departure fees, extra person charges, in-room safe rentals, inspection fees, linen fees, maid/cleaning fees, “peace of mind” fees, pet fees, reservation fees, security deposits, smoking fees, transfer fees, tentative reservation fees, charges for cribs and roll-away beds, and charges for microwave oven and refrigerators.

A taxpayer who meets all the requirements of N.C. Gen. Stat.  §105-244.4(a), who receives a proposed assessment after September 30, 2017, and who would like the Secretary to consider allowing a reduction to the sales and use tax assessment against the taxpayer, must file a written request citing the specific reasons no later than 45 days following the date of the notice of proposed assessment. Additionally, in order for a request to reduce the amount of tax as allowed to be considered by the Secretary, the taxpayer must also file a request for review within 45 days of the date of the notice of proposed assessment by submitting a completed Form NC-242, Objection and Requested for Departmental Review. Both the written request and the completed Form NC-242 should be mailed to the following address:

Attention: Sales and Use Tax Director

NC Department of Revenue

PO Box 871

Raleigh, NC 27602-0871

To register to collect and remit North Carolina sales and use tax, you will need to complete and mail in the application or complete the Online Business Registration. Alternatively, if you qualify for a sales tax exemption and remitted tax, you may apply for a tax refund with the North Carolina Department of Revenue, by completing the NC-19 Claim for Refund of Taxes Form. 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.