North Carolina Administrative Code › Title 17 - REVENUE › Chapter 07 - SALES AND USE TAX › Subchapter B - STATE SALES AND USE TAX › Section .4100 - ARTISTS: ART DEALERS: PHOTOGRAPHERS: ETC › Section 07B .4105 - PHOTO SUPPLIES AND MATERIALS

Current through Register Vol. 39, No. 2, July 15, 2024
(a) Sales of items, as the term item is defined
											  in G.S.
											  105-164.3, such as frames, films, storage media, and other articles by
											  photographers, photo finishers, videographers, or others are retail sales subject to sales and use tax,
											  pursuant to G.S.
											  105-164.4.
(b) Purchases of
											  items by a commercial or portrait photographer or videographer for use or consumption are subject to sales
											  and use tax, pursuant to G.S.
											  105-164.4. However, pursuant to
											  G.S.
											  105-164.13(5), purchases by commercial or portrait
											  photographers of items including mounts, frames, and paper, which become an ingredient or component part of
											  the finished product are not subject to the sales and use tax when purchased for resale.
(c) Pursuant to
											  G.S.
											  105-164.13(5e), purchases by a commercial or portrait
											  photographers of mill machinery or mill machinery parts or accessories such as films, chemicals, proof paper,
											  cameras, trays, and similar items are exempt from the sales and use tax when the mill machinery or mill
											  machinery parts or accessories are for use in the "production" phase of the manufacturing of photographs. For
											  purposes of this Rule, "Production" as a phase of industrial or manufacturing operations shall mean all steps
											  performed in processing and refining rooms, and in other quarters and departments of a plant, where
											  conditioning, treating, or other operations are done on ingredient materials as an actual routine on the
											  assembly or processing line turning out a finished product of manufacture for sale. The "Production" phase
											  also includes the following:
(1) The movement of raw materials or
											  ingredients from an inventory or a stockpile located on the premises of the manufacturing facility to the
											  assembly or processing line.
(2) The movement of goods in process
											  along the assembly or processing line.
(3) The movement of
											  manufactured products from the assembly or processing line into shipping or storage areas and yards located
											  on the premises of the manufacturing facility.
(4) The work of
											  experimentation and research performed on the manufactured products.
"Production" does not include any activity connected with the
													 movement of raw materials or ingredients into inventory nor does it include "distribution" which is any
													 activity connected with the movement of manufactured products within storage warehouses, shipping rooms, and
													 other such finished product storage areas and the removal of such products therefrom for sale or shipment, or
													 "administration" which is any administrative work of offices, promotion of sales, and collection of
													 accounts.