Narrative Opinion Summary
An excise tax is imposed under G.S. 105-164.6 on the storage, use, or consumption of tangible personal property in North Carolina. When materials are withdrawn from inventory, cut, and turned into swatch books for promotional purposes, this constitutes "use or consumption" under the statute, making them subject to the excise tax, unless exempted by G.S. 105-164.13(8) or excluded per G.S. 105-164.3(19). The petitioner, a furniture manufacturer, does not qualify for the exemption since the fabric used for swatch books is not converted into tangible personal property (furniture) subject to sales tax. G.S. 105-164.3(19) clarifies that "storage" and "use" do not apply to property meant for transport outside the state. The determination that the materials are used and consumed as described negates the need to assess their exclusion under G.S. 105-164.3(19). The judgment of the Superior Court is upheld, with Judge Morris concurring and Judge Baley dissenting.
Legal Issues Addressed
Exclusion of Property under G.S. 105-164.3(19)subscribe to see similar legal issues
Application: The exclusion under G.S. 105-164.3(19) does not apply to the materials used and consumed in swatch books, as they are not intended for transport outside the state.
Reasoning: G.S. 105-164.3(19) clarifies that 'storage' and 'use' do not apply to property meant for transport outside the state.
Exemption from Excise Tax under G.S. 105-164.13(8)subscribe to see similar legal issues
Application: The petitioner, a furniture manufacturer, does not qualify for the exemption because the fabric used for swatch books is not converted into tangible personal property that is subject to sales tax.
Reasoning: The petitioner, a furniture manufacturer, does not qualify for the exemption since the fabric used for swatch books is not converted into tangible personal property (furniture) subject to sales tax.
Imposition of Excise Tax under G.S. 105-164.6subscribe to see similar legal issues
Application: The statute imposes an excise tax on the storage, use, or consumption of tangible personal property in North Carolina, which applies to materials withdrawn from inventory and turned into swatch books for promotional purposes.
Reasoning: An excise tax is imposed under G.S. 105-164.6 on the storage, use, or consumption of tangible personal property in North Carolina. When materials are withdrawn from inventory, cut, and turned into swatch books for promotional purposes, this constitutes 'use or consumption' under the statute, making them subject to the excise tax.
Judgment on Tax Liabilitysubscribe to see similar legal issues
Application: The Superior Court's judgment is upheld in confirming that the materials are used and consumed for promotional purposes, thereby making them subject to the excise tax.
Reasoning: The determination that the materials are used and consumed as described negates the need to assess their exclusion under G.S. 105-164.3(19). The judgment of the Superior Court is upheld, with Judge Morris concurring and Judge Baley dissenting.