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Form E-505 (9-12)

Sales and Use Tax Division

North Carolina Department of Revenue

Post Office Box 25000

Raleigh, North Carolina 27640-0001

To Taxpayers:

This form includes changes enacted by the 2012 Session of the General Assembly to the taxes administered by the

Sales and Use Tax Division. The 2012 Tax Law Changes publication issued by the Department will be available on

the Department’s website, , and will contain more detailed explanations of legislative changes.

Legislative changes supersede any information previously set forth in Sales and Use Tax Administrative Rules,

Technical Bulletins, Notices, and Private Letter Rulings relating to any subject matter of the legislation. This form also

includes information regarding rules adopted by the Streamlined Sales and Use Tax Governing Board, of which North

Carolina is a Member State and is required to follow such rules.

Part I reflects information regarding changes to local sales and use tax rates; Part II reflects various technical,

clarifying, and administrative legislative changes; Part III reflects Streamlined Sales and Use Tax information; and

Part IV reflects administrative reminders.

All taxpayers are encouraged to electronically file Form E-500, Sales and Use Tax Return. To electronically

file Form E-500, Sales and Use Tax Return, visit the Department’s website, , and select

“Electronic Services,” “Businesses” section.

PART I: RATE CHANGES

Effective January 1, 2012

The local rate of sales and use tax for Halifax County increased from 2.0% to 2.25%.

Effective April 1, 2012

The local rate of sales and use tax for Buncombe, Durham, Montgomery, and Orange Counties increased from

2.0% to 2.25%.

As of the date of publication of this form, the general State and local sales and use tax rate applicable to the sales

price of tangible personal property, certain digital products, and certain services is 6.75% in seventy-six counties,

7% in Alexander, Buncombe, Cabarrus, Catawba, Cumberland, Duplin, Durham, Halifax, Haywood, Hertford, Lee,

Martin, Montgomery, New Hanover, Onslow, Orange, Pitt, Randolph, Robeson, Rowan, Sampson, Surry and

Wilkes Counties and 7.25% in Mecklenburg County. The Department will publish notification if any additional

counties adopt the additional 0.25% local levy pursuant to Article 46.

Counties and transportation authorities may enact local government sales and use taxes for public transportation.

Currently, Mecklenburg County is the only county that has adopted a local sales and use tax for public

transportation. The Department will publish notification if any additional counties or transportation authorities adopt

a local government sales and use tax for public transportation.

The “combined general rate” that applies to sales of telecommunications and ancillary services, video

programming, and spirituous liquor other than mixed beverages remains at 7% for all one hundred (100) North

Carolina counties.

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Instructions For Form E-505 - Tax Law Changes - North Carolina Department Of Revenue - 2012