When a contractor or subcontractor makes taxable purchases of tangible personal property for use in this State from a supplier outside this State who does not collect the North Carolina four percent state and any applicable local sales or use tax thereon, such contractor or subcontractor must remit the tax directly to the Department. The supplier shall keep the executed certificate for his records as his authority for not charging tax on the transaction. The retailer-contractor then becomes liable for remitting, directly to the department, tax on the sales price of any tangible personal property sold at retail, and tax on the cost price of any tangible personal property used in the performance of a contract. Contractors and subcontractors may obtain Contractor's and Subcontractor's Certificate, Form E-580, from the Office Services Division, Taxpayer Assistance Section, North Carolina Department of Revenue, to be executed by them and furnished to their vendors in connection with such purchases as the vendors' authority to apply the one percent rate of tax thereto. Manufacturers of pre-fabricated buildings entering into performance contracts for the erection of buildings are liable for payment of the four percent state tax and any applicable local sales or use tax on the cost price of tangible personal property used in the performance of the contract.
Contractors are therefore liable for payment of tax on their purchases of such property.
However, those contractors who have not been classified as retailer-contractors, but who regularly or consistently make retail sales are liable for collecting and remitting the tax on the sales price of the property. Contractors making sales of this nature must register with the Department and pay tax monthly on such sales. Any contractor required to remit tax on his sales who feels that he should be classified as a retailer-contractor should submit full particulars regarding the nature of his business to the Secretary for a determination of his classification. January 1, 1982. Vendors of such items shall register and collect and remit the tax on their sales to contractors and other users or consumers.