Effective retroactively to October 1, 2019, North Carolina has enacted sales and use tax exemptions for:
Additionally, effective June 5, 2020, the legislation enacts a grace period from sales and use tax enforcement actions with respect to the sale of certain digital property by certain continuing education and professional development providers. The Department of Revenue (DOR) shall take no action to assess a person for any sales and use tax due for a filing period beginning on or after October 1, 2019, and ending prior to August 1, 2020, with respect to the retail sale of digital audio works or digital audiovisual works that meet either of these conditions:
The grace period does not apply to a person that received specific written advice from the Secretary for the transactions at issue for the laws in effect for the applicable period or to a person that collected tax and failed to remit it to the DOR.
The legislation also amends the definition of “certain digital property” to be “Specified digital products and additional digital goods. The term does not include an information service or an educational service.” An educational service is the delivery of instruction or training, whether provided in real time, on demand, or at another set time, by or on behalf of a qualifying educational entity where at lease one of the following conditions applies:
See our previous news item North Carolina Expands Applicability of Sales Tax to Digital Property. (Ch. 6 (H.B. 1079), Laws 2020)