17 Replies Latest reply: Feb 18, 2013 11:24 AM by hotspottax RSS

    1% Decrease in North Carolina state sales tax rate

    hotspottax Contributor

      A note to all North Carolina vacation rental owners.  Based on the new budget that was passed in May, the temporary sales tax increase that was legislated in 2009 is expiring.  The sales tax rate in NC will therefore decrease 1.0%, effective 7/1/2011.  Here is a release published by the NC DOR

      http://http://www.ncrma.org/StateandLocalSalesTaxChanges_update.pdf

       

      So for NC owners, any bookings after July 1, should reflect this lower tax rate.  Happy Renting!

       

      Rob Stephens

      HotSpot Tax Services

        • 1% Decrease in North Carolina state sales tax rate
          New Member

          I hope you can help me. I am an owner new to vacation rentals & have no clue what to charge a potential renter in the way of taxes.  I called my County Tax Office today (Pender in NC) & was told that there was no tax to collect (not even State!) Whilst excited at the prospect, I am reluctant to believe that this is true. I have accessed the link in your post but am still confused ... as of 7/1/11 - 4.75% but at the bottom State & Local is listed as 6.75%??? Is it called just "Sales Tax" or is there another terminology that I should be asking about, as I know this varies from State to State (Hotel Tax/Room Tax/Occupancy Tax)? Can you refer me to the correct agencies or offices to find out how & who to file these taxes once collected.  Any advice would be greatly appreciated.

          Thank You.

            • 1% Decrease in North Carolina state sales tax rate
              hotspottax Contributor

              Hi Aussieb,

               

              Unfortunately this is not an uncommon experience when you call a tax office, depending on who picks up the phone.  You are subject to both the state and county sales tax plus a county occupancy tax.  The sales tax rate you pay to NC is 6.75% (4.75% state sales tax and 2.0% Pender County sales tax), plus Pender County has an additional 3.0% local occupancy tax.  Your total tax rate is 9.75%.  The NC sales tax return needs to be filed each quarter and the local Pender County occupancy tax return every month.  If your property is in Surf City, then the 3.0% local tax is paid to the city and not the county.  Call your county finance dept or treasurers office and at the state level contact the NC Department of Revenue.  Or if you are in Surf City or Topsail Beach the city offices may be able to help you.

               

              HotSpot will handle all of the registrations and file all of the monthly and quarterly returns for you.  Our service costs about $10 per month to handle all of this for your location.  If you want more info or to get set up you can visit our website, www.hotspottax.com.  You can also contact me through our website if you have other questions or would like to discuss further.

               

              Rob Stephens

              HotSpot Tax Services

            • 1% Decrease in North Carolina state sales tax rate
              New Member

              Thank you so much for your timely reply.  We have do not have any volume to speak of at this stage but I will surely consider your sevices if business picks up.

              • Re: 1% Decrease in North Carolina state sales tax rate
                New Member

                 

                Hi Rob,


                I'm a rental property owner in McDowell County, NC, and I'd appreciate your help to clear up some confusion about the current NC Sales and Use Tax rate.  I'm looking at this link from the NC Dept of Revenue: http://www.dornc.com/taxes/sales/impnotice1210.pdf , revised on June 14, 2102.  It says:

                 

                The combined State and county sales tax rates in effect as of January 1, 2011 are 7.75% in eighty-two counties, 8% in Alexander, Catawba, Cumberland, Duplin, Haywood, Hertford, Lee, Martin, New Hanover, Onslow, Pitt, Randolph, Robeson, Rowan, Sampson, Surry and Wilkes Counties, and 8.25% in Mecklenburg County.

                 

                The 7.75% rate is different than the 6.75% rate reflected in this thread.  Can you please confirm if the rate has indeed changed?

                 

                Thanks very much!

                 

                  • Re: 1% Decrease in North Carolina state sales tax rate
                    hotspottax Contributor

                    Hello,

                     

                    The combined state and county sales tax rate for McDowell County is 6.75% plus an additional local 5% local accommodations tax, for a total of 11.75%.

                     

                    The publication you reference (which is additional clarification to require the Expedia's and Travelocity's of the world to collect and remit tax) references a Jan 1, 2011 effective date.  The tax deacreased 1% effective June 30, 2011.  So the rates referenced are prior to the decrease. 

                     

                    You will note the June 14 revisions are marked in red.  The June 14 revisions do not address the tax rates, which again are effective Jan 1, 2011.  My guess is they don't go back to all their rulings and publications and change the rates listed at the time, rather they reference the rates effective at the time of the publication.  This makes sense so they avoid having to update all publications everytime a tax rate changes.

                     

                    I hope that helps.


                    Best,

                     

                    Rob Stephens

                    HotSpot Tax Services

                      • Re: 1% Decrease in North Carolina state sales tax rate
                        New Member

                        Hi Rob,

                         

                        Old thread, I know.  Just a quick question for you regarding taxes charged to renters.  I think I'm interpreting the state website incorrectly.  NC has a sales tax rate and each county tacks on an additional 2-2.5% at their discretion.  Then, on top of the sales tax and the bump from the individual county, the county also charges their full tax rate?  To me that seems incredulous that a county can excise their own tax rate above and beyond the state tax rate twice in essence.  Does that make sense?

                         

                        So, for instance, if the state tax rate is 4.75% and Dare county levies an additional 2%, that takes us to 6.75%.  Now, after being subjected to the 6.75%, the property owner also levies their own county tax of 5% or more.  To me it sounds like the counties are double dipping.  What am I missing if anything?

                         

                        Thanks

                          • Re: 1% Decrease in North Carolina state sales tax rate
                            hotspottax Contributor

                            tights24,

                             

                            I think I understand what you are saying.  You are referencing two different types of taxes, sales tax and county Room Occupancy Tax.  The NC requirements are fairly consistent with what we see accross the U.S.  In NC the state administers and authorizes sales taxes and then governing statutes enable each county to charge an additional (up to 6%, i think) local Room Occupancy tax. 

                             

                            It is very common for additional taxes to be piled on short term rentals/accommodations/hotels.  In NC, I think almost all the county tax goes to fund tourism and tourism development authorities, if that makes you feel any better.  But you are correct that lodging (in whatever form) is a heavily taxed business segment, usually much more than business that are only taxed by sales tax.

                             

                            I hope the info is helpful.


                            Best,

                             

                             

                            Rob Stephens

                            HotSpot Tax

                      • Re: 1% Decrease in North Carolina state sales tax rate
                        Contributor

                        Hey that’s great News! It’s like bonanza offer. It is also found that he new combined state and county rate in Durham, Wake and 80 other counties will be 6.75%. You can also refer to refer to GAP 200.230, Sales and Use Tax for full details on the treatment of sales tax.