
The North Carolina Department of Revenue has made it convenient and easy for businesses and taxpayers to file and pay their sales and use tax online. In this article, we will provide a detailed walkthrough of the process, ensuring that you have all the necessary information to file your taxes accurately and efficiently.
Before we start, please note that the information provided in this article is for illustrative purposes only and should not be considered specific tax advice. For any specific questions relating to your tax return, refer to the Form E-500 instructions on the department’s website or reach out to the department for assistance.
Step 1: Accessing the Online Filing System
To begin the process, visit the North Carolina Department of Revenue’s website at ncdor.gov. Once on the website, navigate to the “Taxes and Forms” section and click on “Sales and Use Tax.” Next, select “File and Pay E-500” on the right side of the page. It’s important to note that there are multiple ways to access the filing and paying option for a North Carolina sales and use tax return.
Step 2: Utilizing the Help Feature
Before diving into the online filing process, take a moment to review the helpful features available on the page. Within the document, you’ll find assistance and answers to common questions that may arise while filing your sales and use tax return electronically. The help feature will guide you in selecting the correct filing option and provide line-by-line guidance on completing the Form E-500.
Step 3: Enter Contact Information
Once you’ve familiarized yourself with the help feature, proceed to enter your contact information. Provide the name of the person filing on behalf of the business or taxpayer in the designated field. Include a valid email address where your sales and use return confirmation will be sent. Lastly, enter a working phone number where you can be reached in case there are any questions regarding your account.
Step 4: Enter Account ID
Next, enter the Account ID that was provided to you when you completed the business registration form with the department. In most cases, the Account ID will start with a 6 and consist of 9 digits. If you don’t know or cannot locate your Account ID, it is advisable to contact the department for further assistance.
Step 5: Verify Business and Account Information
After submitting your Account ID, ensure that the business and account information listed on the page is accurate. Once verified, click “Next” to proceed with the filing process. Do not input your sales account ID again unless your business name is not listed.
Step 6: Select Filing Option
To file and pay your business’s sales and/or use tax liability, select the appropriate filing option. If you need to submit a zero tax return, choose the first option. The third option should be selected if you do not have receipts to report or if you had non-taxable receipts to report. There may be instances where the department contacts you to submit payment only, in which case, choose the fourth option. Make your selection and click “Next.”
Step 7: Enter Period Ending Date
Enter the period ending date for the return you are filing. The online filing system is designed to utilize period ending dates that correspond with the filing status you selected when registering your business with the department. Monthly filers will see 12 possible period ending dates, while quarterly filers will have four options to choose from. Select the appropriate date for your filing status and click “Next.”
Step 8: Enter Social Security Number or FEIN
Provide your Social Security Number or Federal Employer Identification Number (FEIN) and click “Next.”
Step 9: Complete Sales and Use Liability
When filling out the sales and use liability section, understand that use tax is reported under the “Purchases for Use” column, while sales tax is reported under the “Receipts” column. The current tax rates in Durham County and Mecklenburg County are 7.5 percent and 7.25 percent, respectively. Additionally, both counties are required to collect a transit tax of 0.5 percent. This transit tax is included in the total tax rate for each county but will be broken out separately on the forms.
For example, let’s assume the business operates a t-shirt company based in Durham County but also conducts online sales in Mecklenburg County. Enter the total amount of gross receipts (excluding tax collected) into Line 1. In this example, the total sales in Durham County amount to $28,382.32, and the sales in Mecklenburg County amount to $4,000, resulting in a total of $32,382.32.
On Line 4, enter the amount of receipts subject to the general state rate. In this case, it would be $32,382.32 multiplied by the 4.75 percent general state rate.
Similarly, enter the gross amount of sales made in Mecklenburg County on Line 9, and in Durham County on Line 10. The county rates for Mecklenburg County and Durham County are 2 percent and 2.25 percent, respectively. The system will automatically calculate the tax owed in these counties when you move to the next box or press the “Tab” button.
For Line 11, enter the gross receipts for both counties, which will be subject to the 0.5 percent transit rate.
It is important to note the amount of county tax under the “Tax” column for Lines 9, 10, and 11 as you will need this information to complete the Form E-536 County Breakdown on the next page. Keep these numbers handy for reference.
The total tax liability will be automatically calculated and displayed on Lines 13, 15, and 21.
Step 10: Enter County Tax Amount
Having calculated the total tax liability, proceed to enter the amount of county tax owed for each county in the applicable column. For instance, the county tax amount for sales received in Durham County will be entered on Line 32, columns 2 and 3. Refer to the example given earlier, where Line 2 equals $638.60, and Line 3 amounts to $141.91.
Similarly, the county tax amount for sales received in Mecklenburg County should be entered on Line 60, columns 1 and 3. Using the example mentioned earlier, Line 1 will be $80, and Line 3 will be $20.
Click “Next” to proceed.
Step 11: Choose Payment Method
You have the option to submit payment via credit card or bank draft. If opting for credit card payment, please note that there is a $2 convenience fee for every increment of $100 in tax.
For our example, we will select the bank draft payment option, for which there is no fee. Provide your bank routing number, bank account number, and select the appropriate bank account type for the transaction. Take note of the date on which the bank draft will occur.
Verify your bank account number for accuracy and double-check all the information you’ve entered before submitting the payment.
Step 12: Confirmation and Record Keeping
Once the information is verified, select “Submit.” Upon successful submission, a confirmation number will be displayed on the screen. Make sure to record this number for your reference. Additionally, you will receive an email confirmation within two business days. The confirmation will be sent to the email address you provided at the beginning of the process.
Need Further Assistance?
If you still have questions about filing your sales and use tax return, or if you want to enhance your understanding of sales and use tax regulations, consider attending one of the North Carolina Department of Revenue’s free virtual sales and use tax webinars. You can also explore the Sales and Use Tax 101 e-module for comprehensive information on the subject.
In conclusion, the North Carolina Department of Revenue has simplified the process of filing and paying sales and use tax by providing an online platform. By following the steps outlined in this article, you can navigate the process with ease and ensure accurate submission of your taxes. Remember, always refer to the official instructions and guidelines for specific questions and seek assistance when necessary.