17 N.C. Admin Code 07B .3801 - Promotional Items and Gifts

(a)  Purchases by a person of items, as the term item is defined in G.S. 105-164.3, for use by the person as promotional items or gifts are not purchases for resale and are subject to sales or use tax, pursuant to G.S. 105-164.4. If the seller does not collect the North Carolina sales and use tax on such sales, the purchaser shall remit the use tax, pursuant to G.S. 105-164.6, directly to the Department.

(b)  Purchases by a person of items for use in satisfying a customer's redemption of reward points or items earned by the customer through a rewards program are not purchases for resale and are subject to sales or use tax, pursuant to G.S. 105-164.4. If the seller does not collect North Carolina sales and use tax on such sales, the purchaser shall remit the use tax, pursuant to G.S. 105-164.6, directly to the Department.

(c)  If the item purchased is of the type or character customarily sold by a retailer, the retailer may purchase the item without payment of the sales tax as a purchase for resale when the retailer complies with 17 NCAC 07B .0106. The retailer shall remit the use tax, pursuant to G.S. 105-164.6, to the Department on all taxable items withdrawn from inventory and used as promotional items or gifts.