Are North Carolina Cloud Service exempt from Sales Tax?
You may have heard that NC does not charge sales tax for cloud services or SaaS (Software as a Service). Many states waive sales tax on cloud services to spur economic development in a growth industry. According to taxjar.com Thirty states do not charge sales tax on cloud computing IT services or SaaS. Fifteen do charge sales tax on cloud computing and SaaS and five states do not charge sales tax and sales and use tax.
What about North Carolina NC Department of Revenue?
Being one to be cautious, I called NCDOR several times and got different answers. I called and was told that she could not find a NCGS statute to waive sales tax on cloud computing services. Then I looked on the web and found conflicting information. I called back to NCDOR and spoke to another representative. I assume she was a manager. She said, “said absolutely NC does NOT charge sales tax on cloud service but does charge tax on equipment sold.” I was relieved until I requested that she send me the statue….. She said, there is no statue but do not report the revenue nor collect it…..Yikes…
The conclusion is call NCDOR and consult with your tax professional.