North Carolina has issued a notice stating that effective June 12, 2018, retailers may recover North Carolina sales and use tax paid on property or services if the retailer subsequently resells the property or services at retail, without the property or services being used by the retailer. The retailer may reduce taxable receipts for the period in which the subsequent retail sale occurs by the taxable amount of the purchase price of the property or services resold. This scenario may occur when a company purchases an item intended for use like a piece of office equipment then subsequently resells the equipment to a third party and collects sales tax from the buyer. There is no mention of what is considered subsequent resale but in general the item would have to be unused. Any amount of tax recovered in excess of tax due for a reporting period is not subject to refund, but it may be carried forward to a subsequent reporting period and taken as an adjustment to taxable receipts on that period’s sales and use tax return. The records of a retailer who reduces its taxable receipts must clearly reflect and support the adjustment to taxable receipts for the period in which the adjustment is made. Failure of a retailer to keep records that establish that it qualifies for a recovery of sales and use tax originally paid to a seller disqualifies the retailer from recovering the sales and use tax originally paid. (Important Notice: Retailer May Recover Certain Sales and Use Tax Paid, North Carolina Department of Revenue, October 1, 2018)