The 2002 session of the General Assembly enacted legislation that provides all counties with authority to levy an additional ½% local sales and use tax. 89 of the 100 counties in North Carolina chose to adopt the levy with an effective date of December 1, 2002 or January 1, 2003. The remaining eleven counties will adopt the levy effective July 1, 2003. In June 2003, registered sales and use taxpayers will receive a notice about the increase in county tax that will contain a list of the eleven counties that will levy the additional tax effective July 1, 2003. An updated list of the counties that have adopted resolutions to levy the additional ½% sales and use tax and the effective dates can be found at the following link:

• List of Counties Levying the Additional ½% Sales and Use Tax

The local rate in counties that have enacted the tax is 2½% (3% in Mecklenburg County) for a combined State and county rate of 7% (7½% in Mecklenburg County). The new local rate applies only to sales of tangible personal property and other transactions that are subject to the State 4½% rate of sales or use tax. Sales of food that are subject to the 2% food rate of tax are not subject to the additional ½% tax or to State sales or use tax.

The additional ½% county sales and use tax does not apply to construction materials purchased to fulfill a lump-sum or unit-price contract entered into or awarded before the effective date of the levy or entered into or awarded pursuant to a bid made before the effective date of the levy. Form E-589B, Affidavit To Exempt Contractors From the Third ½% Local Government Sales and Use Tax, is to be used by contractors that are engaged in performing contracts exempt from the additional tax.

Sales and use tax returns contain lines to report and compute tax at the 2%, 2½%, and ½% Mecklenburg Public Transportation rates. Supplies of these returns are mailed annually to monthly filers in October and to quarterly filers in December. Taxpayers who are liable for remitting tax for more than one county should file Form E-536, Schedule of County Sales and Use Taxes, which has been revised to include entries for the 2% and 2½% tax for each county and the ½% Mecklenburg Public Transportation tax. A 7½% tax chart for Mecklenburg County Sales is available below.

The following resources provide additional information on the tax increase:

• Important Notice: Additional ½% County Sales and Use Tax Effective December 1, 2002
• Important Notice: Additional ½% County Sales and Use Tax Effective January 1, 2003
• Important Notice: Additional ½% County Sales and Use Tax Effective July 1, 2003
• Form E-502J, 7% Combined State and Local Sales and Use Tax Chart
• Form E-502K, 7.5% Combined State and Local Sales and Use Tax Chart for Mecklenburg County
• Form E-536, Schedule of County Sales and Use Taxes
• Form Gen 562, County Sales and Use Tax Rates For Incorporated Cities and Towns
• Form E-589B, Affidavit To Exempt Contractors From the Third ½% Local Government Sales and Use Tax
• Application of Additional ½% Local Tax to Construction Materials
  

Last modified on: 10/31/07 03:54:05 PM .