2010 North Carolina Code
Chapter 105 Taxation.
Article 5 - Sales and Use Tax.
105-164.4B. Sourcing principles.

105‑164.4B. Sourcing principles.

(a) General Principles. The following principles apply in determining where to source the sale of a product. These principles apply regardless of the nature of the product.

(1) Over‑the‑counter. When a purchaser receives a product at a business location of the seller, the sale is sourced to that business location.

(2) Delivery to specified address. When a purchaser receives a product at a location specified by the purchaser and the location is not a business location of the seller, the sale is sourced to the location where the purchaser receives the product.

(3) Delivery address unknown. When a seller of a product does not know the address where a product is received, the sale is sourced to the first address or location listed in this subdivision that is known to the seller:

a. The business or home address of the purchaser.

b. The billing address of the purchaser or, if the product is prepaid wireless calling service, the location associated with the mobile telephone number.

c. The address from which tangible personal property was shipped or from which a service was provided.

(b) Periodic Rental Payments. When a lease or rental agreement requires recurring periodic payments, the payments are sourced as follows:

(1) For leased or rented property, the first payment is sourced in accordance with the principles set out in subsection (a) of this section and each subsequent payment is sourced to the primary location of the leased or rented property for the period covered by the payment. This subdivision applies to all property except a motor vehicle, an aircraft, transportation equipment, and a utility company railway car.

(2) For leased or rented property that is a motor vehicle or an aircraft but is not transportation equipment, all payments are sourced to the primary location of the leased or rented property for the period covered by the payment.

(3) For leased or rented property that is transportation equipment, all payments are sourced in accordance with the principles set out in subsection (a) of this section.

(4) For a railway car that is leased or rented by a utility company and would be transportation equipment if it were used in interstate commerce, all payments are sourced in accordance with the principles set out in subsection (a) of this section.

(c) Transportation Equipment Defined. As used in the section, the term "transportation equipment" means any of the following used to carry persons or property in interstate commerce: a locomotive, a railway car, a commercial motor vehicle as defined in G.S. 20‑4.01, or an aircraft. The term includes a container designed for use on the equipment and a component part of the equipment.

(d) Exceptions. This section does not apply to the following:

(1) Telecommunications services. Telecommunications services are sourced in accordance with G.S. 105‑164.4C.

(2) Direct mail. Direct mail that meets one of the following descriptions is sourced to the location where the property is delivered, and direct mail that does not meet one of these descriptions is sourced to the location from which the direct mail was shipped:

a. Direct mail purchased pursuant to a direct pay permit.

b. When the purchaser provides the seller with information to show the jurisdictions to which the direct mail is to be delivered.

(3) Florist wire sale. A florist wire sale is sourced to the business location of the florist that takes an order for the sale. A "florist wire sale" is a sale in which a retail florist takes a customer's order and transmits the order to another retail florist to be filled and delivered.

(e) (Effective January 1, 2011) Accommodations. The rental of an accommodation, as defined in G.S. 105‑164.4(a)(3), is sourced to the location of the accommodation. (2001‑347, s. 2.9; 2002‑16, s. 5; 2003‑284, s. 45.3; 2004‑170, s. 20; 2006‑33, s. 3; 2006‑66, s. 24.13(a); 2008‑187, s. 42; 2009‑445, s. 12; 2010‑31, s. 31.6(b); 2010‑123, s. 10.2.)