E589j - North Carolina Department Of Revenue Affidavit To Exempt From Sales And Use Tax Page 2
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E-589J
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Instructions
1. For the purpose of this affidavit, a “person” may include a real property contractor, retailer-contractor, retailer, or a
subcontractor of a real property contractor, retailer-contractor, or retailer.
2. Sales and use tax laws effective until March 1, 2016 are applicable to transactions and charges on or after March 1, 2016
to fulfill a lump-sum or unit-price contract entered into, awarded, or entered into or awarded pursuant to a bid made prior
to March 1, 2016, (“Qualifying Contract”), for purposes of this affidavit.
3. When a retailer receives an affidavit provided by a purchaser who checks Box 1, the retailer should not honor an affidavit
provided by a purchaser where the retailer is unable to separately identify the installation charges on the invoice or similar
document given to the purchaser at the time of the sale. Additionally, when a retailer receives an affidavit provided by
a purchaser who checks Box 3, the retailer should not honor an affidavit provided by the purchaser where the retailer is
unable to accommodate the request to properly determine the retailer’s tax liability under the laws in effect prior to March
1, 2016.
4. This affidavit must be fully completed by a person who makes a qualifying purchase or charge. If a person subcontracts
any portion of the Qualifying Contract, the subcontractor must complete this affidavit and provide it to the seller in order
to make a purchase or certain charges exempt from sales and use tax for use to fulfill a Qualifying Contract. The affidavit
must be submitted by such real property contractor or retailer-contractor, (subcontractor, if applicable) of the real property
contractor, to a retailer as evidence of the Qualifying Contract; otherwise the sales and use tax laws in effect on or after
March 1, 2016 apply to a purchase or charge, no matter that such is to fulfill a Qualifying Contract.
5. When a retailer or retailer-contractor, as a contractor or subcontractor for a Qualifying Contract, withdraws tangible
personal property from inventory and installs or affixes to real property to fulfill a Qualifying Contract, use tax must be
accrued and paid on the retailer-contractor’s purchase price of the tangible personal property, unless an exemption for
tangible personal property in effect prior to March 1, 2016 applies to the Qualifying Contract.
6. Purchase orders, invoices, shipping orders, delivery tickets, or any other pertinent records of a person will be subject to
examination as evidence of such facts.
7. Under the provisions of N.C. Gen. Stat. § 105-236(7), any person who willfully attempts, or who aids or abets any person
to attempt in any manner to evade or defeat any tax imposed by law, or the payment of the tax, is guilty of a Class H
felony. For misuse of an exemption certificate, the Secretary must assess against the purchaser a penalty of $250.00.
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