North Carolina Expands Large Fulfillment Facility Exemption

Effective July 1, 2020, North Carolina’s sales and use tax exemption on sales of equipment, accessories, attachments, or repair parts purchased by a large fulfillment facility is expanded to include:

  • Sales made to a contractor or subcontractor if the purchase is for use in the performance of a contract with the large fulfillment facility
  • Equipment, accessories, attachments, or repair parts used at the large fulfillment facility for bailing previously used packaging for resale, sanitizing required by federal law, or material handling

A large fulfillment facility is a facility that is used primarily for receiving, inventorying, sorting, repackaging and distributing finished retail products for the purpose of fulfilling customers’ orders and that the Secretary of Commerce has certified that an investment of private funds of at least $100,000,000 has been or will be made in real and tangible personal property for the facility within five years after the date on which the first property investment is made and that the facility will achieve an employment level of at least 400 within 5 years after the facility is placed into service and maintain that minimum level of employment throughout its operation.

Effective June 5, 2020, a large fulfillment facility is allowed a refund of all North Carolina state and local sales and use taxes paid, or paid by a contractor or subcontractor on the large fulfillment facility’s behalf, for purchases of items eligible for exemption as outlined above, if the purchase was made on or after April 1, 2020 but before July 1, 2020. The refund request must be in writing and must include any information and documentation required by the Secretary of Revenue. The refund request must be made on or after July 1, 2020 and is due before October 1, 2020. A refund allowed under this provision is not an overpayment of tax and does not accrue interest. (Ch. 6 (H.B. 1079), Laws 2020)

For more information on North Carolina tax exemptions for large fulfillment facilities, visit our previous news item.

Posted on June 29, 2020