Instructions For Form E-500 Sales And Use Tax Return (Page 4 of 6) in pdf

10/15/2002

Line 9 -

1% State Rate: The 1% State tax applies to the sales price of some fuels, other than

electricity, sold to farmers, manufacturing industries and plants and commercial laundries

and dry cleaning establishments.

Examples of items subject to the 1% State tax with an $80.00 maximum tax per article

include: machines and machinery sold to farmers for use in planting, cultivating, harvesting

or curing farm crops; mill machinery, mill machinery parts and accessories sold to

manufacturing industries and plants for use in production; sales of central office

equipment, switchboard and private branch exchange equipment to telecommunications

companies; special machinery sold to commercial laundries, pressing and dry cleaning

establishments or freezer locker plants; broadcasting equipment, parts and accessories

and towers to commercial radio and television companies; bulk tobacco barns and racks

and all parts and accessories thereto; sales to farmers of grain, feed, or soybean storage

facilities and accessories thereto; and sales of containers to farmers or producers for

specific purposes.

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 1%.

EXAMPLE: Since some items at the 1% rate qualify for a maximum tax of $80 per article.

For these items only, enter the amount necessary to arrive at the appropriate

tax. For example, a tractor sold to a farmer with a purchase price of $10,000

only has a tax of $80. Therefore, enter $8,000 on Line 9 and enter the

difference of $2,000 on Line 3, since $2,000 is exempt from tax.

Line 10 - 2% County Rate: See Nos. 7 through 10 under General Instructions. Items subject to the

4.5% general State rate (Line 5) or 4% State rate (Line 6) are also subject to the 2% local

sales and use tax rate which is currently levied by all counties in North Carolina. These

items are also subject to the .5% Mecklenburg County Public Transportation sales and use

tax rate if the item is sold or delivered in Mecklenburg County. The Mecklenburg County

Public Transportation sales and use tax is reported on Line 12. The 2% local tax also

applies to sales of food products that are specifically exempted from State tax.

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 a

taxing county from vendors outside North Carolina not required to collect the 2% county

tax. This amount should include those items in the column “Purchases for Use” on Lines 5

and 6.

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

subject to the 2% rate of county tax excluding the tax collected. This amount should

include those items in the column “Receipts” on Lines 5 and 6. Calculate the tax by adding

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

Sales and Use Tax Division

Instructions For Form E-500 Sales And Use Tax Return Page 4

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