North Carolina: Could I Have a Fork, Please?
- Sales Tax News
- Sep 15, 2014 | Gail Cole
“When you come to a fork in the road take it.” –Yogi Berra
In North Carolina, sales of bakery items by artisan bakeries are subject to the reduced 2% sales tax rate so long as the bakery does not provide eating utensils to the customers. Sales made by bakery thrift stores in North Carolina are subject to the higher, combined state and local sales tax rate.
The North Carolina Department of Revenue explains it like this:
“Sales of bakery items by an artisan bakery without eating utensils or without eating utensils being available to purchasers are only subject to the 2% local rate of tax.
If a bakery does not meet all… requirements for the artisan bakery exemption, the 4.75% general State and applicable local and transit rates of sales and use tax apply on sales of all bakery items by such bakery.”
An artisan bakery is a bakery that derives more than 80% of its gross receipts from the sale of bakery items and has annual gross receipts (combined with the gross receipts of all related persons …) not in excess of $1,800,000.
Put another way, if there are eating utensils in the house, an artisan bakery must charge the higher rate of sales tax.
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