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

10/15/2002

Line 17 - Penalty - State and County: Penalties are computed separately for State and county tax. If

the return is filed after the due date, add the failure to file return penalty of 5% per month

of the State tax and 5% per month of the county tax for each month, or fraction thereof, that the

return is filed late. The maximum failure to file return penalty is 25% of the State tax due and

25% of the county tax due. The minimum failure to file return penalty is $5.00 for the State and

$5.00 for the county, for a total of $10.00 if both State and county tax are reported. If the tax

was not paid when due, add the failure to pay tax when due penalty of 10% of the tax. The

minimum failure to pay penalty is $5.00 for the State and $5.00 for the county, for a total of

$10.00 if both State and county tax are due.

Therefore, if State and county tax are reported on a late filed return and the tax was not paid

when due, there is a total minimum penalty of $20.00.

Penalties for Semimonthly Taxpayers Only:

Semimonthly taxpayers are required to make payments of tax due twice a month on the 25th of

the month, for the first 15 days of the month, and the 10th of the following month, for the last

half of the preceding month. A return for the entire month is required to be filed by the 20th of

the following month for the preceding month along with payment of any underpayment of tax

for the monthly period.

Penalties and interest are due on the underpayment for a semimonthly period unless the

taxpayer has timely paid at least 95% of the lesser of the amount due for each semimonthly

period or the average semimonthly payment for the calendar year, and includes the

underpayment with the monthly return for those payment periods.

Line 18 - Interest - State and County: If the return is filed after the due date, compute interest on the

total tax shown to be due on Line 16 from the time the taxes were due until paid. See

Instructions for Line 17 for additional information regarding interest for not paying 95% of the

tax due on the prepayments due on the 25th and 10th. The Secretary of Revenue establishes

the interest rate on a semiannual basis. The current interest rate can be found on the

Department’s website.

Line 19 - Less Prepayments: This line is for use by semimonthly taxpayers (filers remitting $10,000 or

more in tax per month) only. See Instructions for Line 17 for additional information regarding

penalties for not paying 95% of the tax due on the payments due on the 25th and 10th. Enter

the total amount of any electronic funds transfer (EFT) payments made for this period prior to

this return.

Line 20 - Less any Credit: If you are claiming a credit for sales and use tax previously paid in error,

enter the amount. To prevent an assessment, attach an explanation for the credit to the return

and mail the supporting documentation to:

North Carolina Department of Revenue

Examination Division

Sales and Use Tax Unit

PO Box 871

Raleigh, NC 27602-0871

Note: Include your account number and the period for which you are claiming the credit on

your correspondence.

Line 21 - Total Due: Calculate the total due by adding Lines 16 through 18 and subtracting any

prepayments on Line 19 and any credit amount on Line 20.

Sales and Use Tax Division

Instructions For Form E-500 Sales And Use Tax Return Page 6

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