Certain Machinery and Equipment Tax
See Article 5 of Chapter 105 of the North Carolina Revenue Laws for specific statutory language. Generally, a privilege tax at a rate of one percent (1%) with a maximum tax of eighty dollars ($80.00) per article is imposed on the following:
- The purchase of mill machinery or mill machinery parts or accessories by manufacturing industries or plants;
- The purchase of mill machinery or mill machinery parts or accessories by contractors or subcontractors for use in the performance of a contract with a manufacturing industry or plant;
- Certain purchases by a major recycling facility for use in connection with the facility;
- Qualifying equipment or attachments or repair parts for equipment purchased by research and development companies under certain conditions;
- Qualifying equipment or attachments or repair parts for equipment purchased by a software publishing company under certain conditions;
- The purchase of equipment or an attachment or repair part for equipment by an industrial machinery refurbishing company that meets certain requirements;
- Qualifying purchases by a company located at a ports facility for waterborne commerce;
- Qualifying purchases of mill machinery, distribution machinery, or parts or accessories for mill machinery by a qualifying large manufacturing and distribution facility;
- Qualifying purchases by certain recyclers other than those subject to the privilege tax as a major recycling facility;
- Qualifying purchases by a company primarily engaged at the establishment in processing tangible personal property for the purpose of extracting precious metals;
- Qualifying purchases by certain companies engaged in the fabrication of metal work.
The privilege tax is imposed on the purchaser or lessee of the qualifying property, and the purchaser or lessee is liable for accruing and remitting the tax to the Department.
For a business or person who is not registered with the Department and is required to remit the certain machinery and equipment tax, register online using the online business registration portal. A taxpayer who currently files and remits sales and use tax should file and remit the certain machinery and equipment tax using the same filing frequency and payment method that the taxpayer uses for sales and use tax.
The certain machinery and equipment tax is to be reported to the Department on the Machinery and Equipment Tax Return, Form E-500J.
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