The North Carolina Tax Simplification and Reduction Act (Session Law 2013-316) was passed by the North Carolina General Assembly and signed into law by the Governor on August 23, 2013. Included in this law is the repeal of the exemption effective January 1, 2014 for the sale at retail locations and the use, storage, or consumption in the state of North Carolina of “[p]repared food and food served to students in dining rooms regularly operated by State or private educational institutions or student organizations thereof.”
As a result of the repeal of this exemption, the sales of prepared food and food served to students in university dining facilities are now subject to sales tax. The current sales tax rate is 7.00% (NC State tax rate of 4.75% and New Hanover County tax rate of 2.25%). To effect this change in state law, the University is applying state and local sales tax against the meal plan charges on the billing statement. A table is provided below that presents each meal plan cost, the applicable sales tax, and the total billable amount. The application of the state and local sales tax on meal plans is based on current guidance from the North Carolina Department of Revenue.
The official North Carolina Department of Revenue publication can be viewed at http://www.dornc.com/downloads/e505_9-13.pdf(applicable section is Part III, Effective January 1, 2014, “Food and Prepared Food Served at Institutions of Higher Education“).
Please use this information as you select the meal plan most appropriate for your needs. Also note your Fall semester meal plan will be re-assigned automatically to spring semester as long as the student is registered for Spring semester classes. The sales price of student meal plans for the semester have been adjusted in order to accommodate the 7% sales tax due. The Meal Swipe portion will be taxed upon meal plan purchase, and Food Dollars will be taxed as they are used.