In an effort to help small businesses recover from failure to pay sales tax liability, North Carolina Department of Revenue and the North Carolina Small Business Commissioners Office have teamed together to help small businesses bring themselves out of hock and into grace. According to the Triangle Business Journal, “The effort, dubbed the small business taxpayer recovery program, will offer penalty and fee waivers as well as payment plans.”
DOR Secretary David Hoyle says, “The recent recession has caused financial difficulties for many small businesses in North Carolina. One of our agency goals is to be firm and fair, while still being compassionate. This program does that, by offering us a tool to collect taxes due the state, while at the same time helping struggling businesses get back on their feet.”
Businesses who wish to participate will be required to use the counseling services of the Small Business and Technology Development Center (SBTDC) or the NC Small Business Center Network (SBCN). Small businesses that complete the counseling and bring their sales tax liabilities up-to-date will be eligible for other programs to help them in the future. Compassion, however, can only go so far…should the business fail to file or remit taxes at a future date, then all forgiven penalties and fees will be reinstated.
In addition to development of this program to help businesses recover from unpaid sales tax debt, North Carolina’s sales and use tax rate decrease went into effect July 1, 2011. According to the recent Sales and Use Tax Notice for North Carolina DOR, “…the general State tax rate applicable to sales and purchases of tangible personal property, certain digital property, and certain services is 4.75%. As a result, the general State and local tax rate will be 6.75% in eighty-two counties, 7% in Alexander, Catawba, Cumberland, Duplin, Haywood, Hertford, Lee, Martin, New Hanover, Onslow, Pitt, Randolph, Robeson, Rowan, Sampson, Surry and Wilkes Counties, and 7.25% in Mecklenburg County.” Over the past few years, the NC sales tax rate has jumped from 4.25% up to 5.75% and now back down to 4.75% at the state level. State and local taxes bring the average sales tax rate to 6.75%-7% in most of North Carolina.
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