Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
By Steven Roll
Under omnibus budget legislation enacted by North Carolina, an out-of-state retailer is presumed to be transacting business in the state and, thus, subject to sales tax collection requirements if it makes more than $10,000 in annual sales from affiliate agreements with in-state residents. [S.B. 202, enacted 8/7/09]
However, S.B. 202 also specifies that a nonresident retailer will not trigger nexus in the state solely by purchasing advertising to be delivered via a broadcast medium such as television, radio, or the internet.
The so-called “Amazon” provision applies when an out-of-state retailer enters into an agreement with a North Carolina resident who refers customers to the retailer in exchange for a commission or other consideration.
S.B. 202 specifies that the presumption applies to referrals made via website links or otherwise.
$10,000 Annual Threshold
An out-of-state retailer must make in excess of $10,000 during the preceding four quarterly periods to become subject to the presumption under the legislation.
The legislation states that a retailer may rebut the nexus presumption by proving that the resident with whom it executed an agreement did not solicit customers on its behalf in a manner that would satisfy the nexus requirement of the U.S. Constitution during the four quarterly periods in question.
“A nonresident retailer who purchases advertising to be delivered by television, by radio, in print, on the Internet, or by any other medium is not considered to be engaged in business in this State based solely on the purchase of the advertising,” the bill states..
The legislation took effect July 1.
The full text of the measure is available at http://www.ncga.state.nc.us/Sessions/2009/Bills/Senate/PDF/S202v8.pdf.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)