Internet Sales Tax Fairness — Click-Through Nexus — North Carolina

Date: 11 Aug 2009 | posted in: Retail | 0 Facebooktwitterredditmail

Following the lead of New York and Rhode Island, in August 2009, North Carolina passed a budget that includes a new provision that requires large e-commerce retailers to collect and remit state sales taxes if they generate more than $10,000 in sales a year through in-state sales affiliates.


Mail Order Remote Sales. – A retailer who makes a mail order remote sale is engaged in business in this State and is subject to the tax levied under this Article if at least one of the following conditions is met:

(3) The retailer has representatives in this State who solicit business or transact business on behalf of the retailer, solicits or transacts business in this State by employees, independent contractors, agents, or other representatives, whether the mail order remote sales thus subject to taxation by this State result from or are related in any other way to such the solicitation or transaction of business. A retailer is presumed to be soliciting or transacting business by an independent contractor, agent, or other representative if the retailer enters into an agreement with a resident of this State under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an Internet Web site or otherwise, to the retailer. This presumption applies only if the cumulative gross receipts from sales by the retailer to purchasers in this State who are referred to the retailer by all residents with this type of agreement with the retailer is in excess of ten thousand dollars ($10,000) during the preceding four quarterly periods. This presumption may be rebutted by proof that the resident with whom the retailer has an agreement did not engage in any solicitation in the State on behalf of the seller that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Independent Business Initiative, which partners with a wide range of allies to implement policies that counter concentrated power and strengthen local economies.