North Carolina- Legislature Approves Sales and Use Tax Exclusion for Digital Educational Services


House Bill 1079 clarifies current tax law to make digital educational content exempt from sales tax.

North Carolina HB 1079 has been approved by both houses of the legislature and now awaits the Governor’s signature.

In particular, the bill would exclude from sales and use tax sales of digital educational services and would exempt: (1) sales to home school operators of digital audio works and digital audiovisual works that are qualifying education expenses; and (2) sales of digital audio works and digital audiovisual works that consist of nontaxable service content when electronically transferred contemporaneously with the provision of the service in real-time.

If signed, these sales and use tax changes would be retroactive to October 1, 2019.


For more information: House Bill 1079

Lexology
By: Jonathan Feldman
June 3 2020