North Carolina’s Machinery and Equipment Privilege Tax Becomes Inapplicable

By Terry Barrett, CPA, Tax Senior Manager

North Carolina’s Machinery and Equipment Privilege Tax Becomes Inapplicable

By Terry Barrett, CPA | Tax Senior Manager | State and Local Tax Industry Team

Beginning July 1, 2018, North Carolina’s one percent (1%) privilege tax will no longer apply to sales and purchases of qualifying mill machinery, mill machinery parts or accessories, and other qualifying items for specific industries.  Examples of equipment no longer subject to the tax include: (i) mill machinery or mill machinery parts and accessories by manufacturing industries and plants and contractors and subcontractors for use in the performance of a contract with a manufacturing industry or plant (ii) manufacturing fuel by manufacturing industries and plants, and (iii) recycling equipment by a major recycling facility.  The maximum tax has been $80.00 per article.

It is noteworthy that such machinery, parts, etc., are not subject to North Carolina’s retail sales and use tax, provided they meet the exemption criteria.

Questions on the changes facing North Carolina retail sales and use taxes? We can help. Contact a member of the State and Local Tax team or Email | 804.747.0000

Additional State and Local Tax Resources:

Effective Soon: Virginia Sales Tax Exemptions for Aircraft

“Supreme Court’s Wayfair Case Will Impact Virginia Businesses”

State Efforts to Collect Sales Use Tax

State and Local Tax Obligations of Emerging Businesses

Federal Tax Reform: State and Local Implications

Tax Cuts and Jobs Act Overview

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About the Author

Terry Barrett

Terry Barrett, CPA, Tax Senior Manager

Terry Barrett specializes in state and local tax concerns for her clients. She has over 30 years of experience working in the public and private accounting sector. She is a graduate of Virginia Commonwealth University.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.


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