17 NCAC 07B .4407. LEASES FOR OUT OF STATE USE

If a lessee leases tangible personal property from a North Carolina lessor for the original purpose of using it outside this state and if the property is, in fact, used outside this state, the initial lease payment will be subject to the North Carolina sales tax if the property is delivered to the lessee in this state and immediately thereafter taken outside this state for use.  In such cases, the lessor's records shall clearly reflect the nature of the transaction.  If the property is returned to North Carolina, the receipts from use in North Carolina are taxable.  If the face amount of the lease is paid in a lump sum, the face amount is subject to the North Carolina sales tax.

 

History Note:        Authority G.S. 105‑164.4; 105‑262;

Eff. February 1, 1976;

Amended Eff. October 1, 1993; July 5, 1980.