Instructions For Form E-500 Sales And Use Tax Return (Page 3 of 6) in pdf

10/15/2002

Enter under the column “Purchases for Use” the total purchase price of any taxable tangible

personal property, which was purchased for storage, use, or consumption in North Carolina

from vendors outside North Carolina on which the State rate of tax was not collected by the

vendors. Do not include tangible personal property purchased for resale.

Enter under the column “Receipts” total taxable receipts, rentals, and sales, which are

subject to the State rate of tax excluding the tax collected. Calculate the tax by adding the

“Purchases for Use” and “Receipts” and multiplying the sum by 4%.

Items subject to the 4% general rate are also subject to the 2% local sales and use tax rate,

which is currently levied, by all counties in North Carolina. This amount should be reported

on Line 10. Mecklenburg County has an additional .5% local sales and use tax for public

transportation which must be reported separately on Line 12.

Line 7 - 3% State Rate: The 3% State rate of tax applies to sales of aircraft, boats, railway cars,

locomotives, mobile classrooms, or mobile offices with a maximum tax of $1,500 per article.

Enter under the column “Purchases for Use” the total purchase price of any taxable tangible

personal property, which was purchased for storage, use, or consumption in North Carolina

from vendors outside North Carolina on which the State rate of tax was not collected by the

vendors. Do not include tangible personal property purchased for resale.

Enter under the column “Receipts” total taxable receipts, rentals, and sales, which are

subject to the State rate of tax excluding the tax collected. Calculate the tax by adding the

“Purchases for Use” and “Receipts” and multiplying the sum by 3%.

EXAMPLE: Since items at the 3% rate qualify for a maximum tax of $1500 per article, only

enter the amount necessary to arrive at the maximum tax. A boat with a

purchase price of $75,000 only has a tax of $1500.00. Therefore, enter

$50,000 on Line 7 and enter the difference of $25,000 on Line 3, since $25,000

is exempt from tax.

Line 8 - 2% State Rate: The 2% State tax applies to sales of manufactured homes with a maximum

tax of $300 per article.

Enter under the column “Purchases for Use” the total purchase price of any taxable tangible

personal property, which was purchased for storage, use, or consumption in North Carolina

from vendors outside North Carolina on which the State rate of tax was not collected by the

vendors. Do not include tangible personal property purchased for resale.

Enter under the column “Receipts” total taxable receipts, rentals, and sales, which are

subject to the State rate of tax excluding the tax collected. Calculate the tax by adding the

“Purchases for Use” and “Receipts” and multiplying the sum by 2%.

EXAMPLE: Since items at the 2% rate qualify for a maximum tax of $300 per article, only

enter the amount necessary to arrive at the maximum tax. For example, a

singlewide manufactured home with a purchase price of $20,000 only has a tax

of $300. Therefore, enter $15,000 on Line 8 and enter the difference of $5,000

on Line 3, since $5,000 is exempt from tax.

Sales and Use Tax Division

Instructions For Form E-500 Sales And Use Tax Return Page 3