North Carolina – State To Tax Certain Digital Property Starting in October 2019


In the last decade, buying habits have shifted dramatically to keep pace with new technologies. Though sales of printed books are experiencing a resurgence, electronic books have a solid market share; sales of streamed music now dwarf digital and vinyl music sales; and so on. This can have a real impact on sales tax revenue, because state sales tax policies don’t change as swiftly as technology.

That’s changing bit by bit, state by state, and it’s an ongoing process. Thus, the North Carolina Legislature recently made several clarifying changes to its sales and use tax law.

North Carolina extended sales and use tax to “certain digital property” (e.g., audio works, audiovisual works, books, greeting cards, photographs, etc.) on January 1, 2010. The law specified that tax applies to “digital property that is delivered or accessed electronically, is not considered tangible personal property, and would be taxable … if sold in a tangible medium” (emphasis mine).


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cpa practice advisor
by gail cole
august 22, 2019