North Carolina – Sales Tax On Rentals Of Private Residences, Cottages, And Other Accommodations

SALT Report 3336 – The North Carolina Department of Revenue is codifying  the interpretation (and eliminating the confusion)  related to the” less than 15 days exclusion”.  Previously the department, through an Important Notice amendment in June 2012, allowed a more liberal interpretation of who applies for the exclusion.

“In the June 14, 2012 amendment to the Important Notice, the Department altered its interpretation to provide the gross receipts derived from the rental of all private residences and cottages for fewer than 15 days in a calendar year were not subject to sales tax…”

However, per this release on April 17, 2014 – “The Department of Revenue asked the General Assembly to provide clarifying legislation upholding the longstanding interpretation prior to change[prior to June 2012]. The Revenue Laws Study Committee has voted to recommend codifying the interpretation held prior to June 14, 2012 in its report to the General Assembly. Additionally, the local occupancy taxes administered by the local governments would apply to the same gross receipts derived from such rentals subject to sales and use tax.”

The “15 day exclusion” will no longer apply to private residences and cottages listed by real estate agents and brokers.

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