North Carolina Department of Revenue  

 Electronic Funds Transfer Program 

                                INTRODUCTION 
 
Effective January 1, 1994, the North Carolina Department of Revenue began requiring 
taxpayers remitting tax payments in excess of certain dollar amounts to make payments 
by electronic funds transfer.   
 
The Department of Revenue currently receives payments electronically for the following 
tax types. 
 
           Withholding Tax
 
           Corporate Estimated Tax 
 
           Utility Franchise Taxes   
 
           Utility & Liquor Sales & Use Tax 
 
           Piped Natural Gas Tax     
 
           Alcoholic Beverage Taxes 
 
           Sales and Use Tax – Semimonthly only 
  
           Machinery, Equipment, & Manufacturing Fuel 
  
           Streamlined Sales Tax      
 
           Tobacco Products Taxes - Cigarette and Other Tobacco Products 
 
           Motor Fuels Taxes  - excluding Highway Use Tax 
 
           Insurance Premium Taxes  
            
                                1

Electronic funds transfer or EFT, as it is commonly called, is any transfer of funds 
initiated through an electronic terminal, telephonic instrument, computer or magnetic 
tape, so as to order, instruct, or authorize a financial institution to debit or credit a bank 
account. 
 
Advantages to taxpayers who remit tax payments by EFT include: 
 
 • Less labor intensive  
 • Less expensive than the processing of paper checks 
 • Reduced postage fees 
 • Taxpayers will know exactly when the account is debited. 
 • EFT can be implemented without significant up-front investment, such as 
   additional computers or remittance processing hardware. 
 
                 TAXPAYER NOTIFICATION  
 
The Department will determine whether a taxpayer is subject to the EFT requirement by 
reviewing tax payment histories for a twelve consecutive month period on a tax-by-tax 
basis.  As such, a company may be subject to the EFT payment requirement for one tax 
type, but may not be liable to make payments for another.  
 
If selected for the EFT payment requirement, taxpayers will be notified at the last 
address of record at least sixty (60) days prior to the first day of the month in which a 
payment is due.  Proper forms with which to register and information regarding the EFT 
Program will be provided.   
 
Once selected to make EFT payments for a particular tax type, taxpayers are required 
to make the EFT payments (regardless of the amount) for a minimum of one year or 
until released from that obligation by the Department.     
 
Taxpayers whose average payments fall below the threshold, will be notified that they 
are no longer required to pay by EFT thirty (30) days prior to the due date of the first 
non-EFT payment.  However, a business may continue making EFT payments on a 
voluntary basis. 
 
Effective January 1, 2000 a corporation that is required under the federal code to pay its 
federal-estimated corporate income tax by electronic funds transfer must pay its State-
estimated tax by electronic funds transfer.  These corporations may not be identifiable 
by the Department for notification.  
 
   COMPLETION OF THE EFT AUTHORIZATION AGREEMENT 
 
Each EFT participant must complete an  Electronic Funds Transfer Authorization 
Agreement (EFT-100) to be registered with the Department  of Revenue.  If you are 
registered as a streamlined sales taxpayer  and would like to pay by the ACH Credit 
method you must complete an Electronic Funds Transfer Authorization Agreement for 

                                     2

Streamlined Sales Tax (EFT-100S).  Authorization Agreements must be completed and 
returned to the Department within thirty (30) calendar days and mailed to: 
 
  Electronic Funds Transfer Section 
  North Carolina Department of Revenue 
  Post Office Box 25000 
  Raleigh, NC  27640-0001 
 
The information requested on the authorization agreement concerning the taxpayer's 
financial institution should only be provided by taxpayers who have selected the ACH 
Debit payment method.  The authorization agreement also requests the name of a 
contact person who will be able to respond to questions regarding EFT payments and to 
whom the Department will direct correspondence concerning the Program.  
 
Note that the Electronic Funds Transfer  Authorization Agreement must be signed by 
someone authorized to act on behalf of the taxpayer (generally this is the person with 
the authority to sign a tax return). 
 
  VOLUNTARY PARTICIPATION 
 
Effective January 1, 1995, the Department of Revenue began allowing taxpayers not 
meeting the threshold requirements for mandatory participation to voluntarily elect to 
participate in the EFT Program.  To enroll in the Program, a taxpayer must complete 
and return an Electronic Funds Transfer  Authorization Agreement (EFT-100).  
Taxpayers electing to voluntarily participate in the EFT Program must do so for a 
minimum of twelve (12) months.  Upon  completion of the twelve-month period, a 
taxpayer may withdraw from the EFT Program by notifying the Department in writing at 
least forty-five (45) days prior to the first non-EFT payment.   If the taxpayer fails to 
make payments electronically after electing to participate, then the penalty for making 
payment in the wrong form under G.S. 105-236(1b) of the North Carolina General 
Statutes will be applicable. 
 
We are offering voluntary participation for the following tax schedules: 
 
  Withholding Tax
 
  Corporate Estimated Tax
 
  Utility Franchise Taxes
 
  Utility & Liquor Sales & Use Tax 
 
  Piped Natural Gas Tax                
 
  Alcoholic Beverage Taxes
 
  Streamlined Sales Tax
 
  Tobacco Products Taxes - Cigarette and Other Tobacco Products 
 
  Motor Fuels Taxes  - excluding Highway Use Tax 
 
  Insurance Premium Taxes
 
                                     3

                          PAYMENT METHODS 
 
There are two payment methods acceptable to the Department of Revenue, the ACH 
Debit and the ACH Credit. 
 
The ACH Debit method is the preferred method for making EFT tax payments.  Since it 
is the preferred method, the Department will bear the cost.  
 
The ACH Credit method is also available but only with the permission of the 
Department.  Taxpayers should first contact their financial institution to confirm they 
offer ACH Credit origination services.  The cost of an ACH Credit transaction is paid by 
the taxpayer, not the Department. 
 
After registering with the Department for  ACH Debit or ACH Credit, an Information 
Booklet with detailed instructions will be sent. 
 
               ACH DEBIT PAYMENT METHOD 
 
Under this method, a taxpayer authorizes a Data Collection  Center (DCC) to 
electronically transfer tax payments from their bank account to the Department's bank 
account.   The transfer is made by contacting the DCC via touch-tone phone, PC 
Software, or through operator assistance.   
 
Taxpayers using the ACH Debit method  will be furnished the necessary detailed 
instructions and calling cards to complete ACH Debit transactions. 
 
Prior to the first transfer, the Department will supply the DCC with the tax and bank 
account information furnished on the authorization agreement.  The Data Collection 
Center will record the information in its database and mail a password directly to the 
taxpayer.  Taxpayers will use the password to communicate payment information to the 
DCC.  This ensures that only the taxpayer has the capability to authorize debits against 
its bank account since transactions cannot  be made without the taxpayer's express 
authorization. 
 
To ensure timely payment, taxpayers must contact the Data Collection Center by 3:45 
p.m., Eastern Time, on the business day prior to the tax due date and provide the 
information necessary to transfer funds.  When the call is completed and the information 
is verified by the Data Collection Center, the amount due is automatically transferred 
from the taxpayer's designated bank account to the Department's bank account on the 
date specified by the taxpayer.  A trace number will be provided at the end of the call to 
the DCC to serve as a receipt to the taxpayer for the transaction(s), as well as, to 
provide an audit trail.   The DCC will provide information to the Department of Revenue 
that will allow the Department to properly credit the taxpayer's tax accounts. 
 
Should the taxpayer discover that an error was made in communicating tax payment 
information to the DCC prior to the cutoff time, the taxpayer may contact the DCC to 

                                            4

revise or cancel the transaction.  The Department does offer payment warehousing.  A 
transaction can be warehoused for up to 60 days.  The transaction will be deposited into 
the Department’s account on the banking day you specify during your call. 
 
Successful completion of the call to the Data Collection Center fulfills a taxpayer's 
obligation for initiating an ACH Debit transaction.   
 
 ACH CREDIT PAYMENT METHOD 
 
The ACH Credit method allows taxpayers to transfer funds by instructing their financial 
institution to debit their account and credit the Department’s bank account. The 
Department of Revenue will allow the use of the ACH Credit method with prior approval.  
To obtain permission to use this method, taxpayers must submit an Electronic Funds 
Transfer Authorization Agreement (EFT-100) providing the necessary information.  
Each request will be reviewed on a case-by-case basis.  Taxpayers are urged to contact 
their financial institution to confirm they offer ACH Credit origination services in the 
required format.  Taxpayers are responsible for the cost of ACH Credit transactions.   
 
After registering with the Department, an Information Booklet containing documentation 
necessary to make ACH Credit transfers, including the Department's banking 
information, will be sent.         
 
All ACH Credit transactions must utilize the NACHA    CCD+ (Cash Concentration or 
Disbursement Plus) Format with the TXP  Banking Convention addenda record.  The 
TXP Banking Convention addenda record requires the following information: 
 
 (1)  Taxpayer identification number 
 (2)  Tax type code 
 (3)  Tax period end date 
 (4)  Payment amount type 
 (5)  Amount of payment 
 
Taxpayers must contact their financial institution at least one business day prior to the 
due date and instruct them to initiate the transfer to the Department's bank account for 
the amount of the tax payment.  The taxpayer must ensure that the financial institution 
originating the transaction does so in sufficient time for the payment to be deposited to 
the Department's account on  or before the appropriate due  date of the tax payment.  
Taxpayers are encouraged to make arrangements with their financial  institutions to 
initiate prenotification (prenote) transactions at least ten (10) days before the effective 
due date of the first payment to detect any format errors before live dollar entries are 
sent through the ACH network. 
 
The Department assumes no responsibility  for a tax payment  made under the ACH 
Credit method until and unless the payment  has been credited to  the Department's 
designated account with its financial institution. 

                                   5

                     HOLIDAYS AND WEEKENDS 
 
Taxpayers required to participate in the Department of Revenue's EFT Program must 
initiate tax payments so that the amount due settles into the Department's bank account 
on or before the due date of the payment under the appropriate Revenue Law. 
 
If a tax due date falls on a Saturday, Sunday, or a State or bank holiday, the deposit by 
electronic funds transfer is required on or before the next banking day.  
 
If the call-in day falls on a Saturday, Sunday, or a State or bank holiday, the transaction 
must be initiated by 3:45pm EST on the preceding business day (the prior day).      
 
            TAX RETURN FILING REQUIREMENTS 
 
Paying by EFT does not change the filing requirements or due dates for tax returns that 
are required to be filed. The lists below show all the returns that are required to be filed 
even if payment is made via  EFT and the returns that are  not required to be filed if 
payment is by EFT.   
 
NOTE: If you are making an EFT payment that requires a return to be filed and the 
return is not submitted, your account will become delinquent and you will be 
subject to additional penalties and interest. 
 
Returns required to be filed: 
 
 Sales & Use Tax 
   
            (1)  E-500 – Sales & Use Tax Return 
            (2)  E-500J – Machinery, Equipment, and Fuel Tax Return 
 
            Utility & Liquor Sales & Use Tax 
 
            (1) E-500E – Utility & Liquor Sales & Use Tax Return 
 
            Utilities Franchise Tax 
 
            (1) CD-310 Utilities Franchise Tax Return Electric Companies 
            (2) CD-318 Utilities Franchise Tax Return Water & Sewer Companies 
 
            Piped Natural Gas 
 
            (1) CD-312 Excise Tax Return Piped Natural Gas 
 
                                             6

Returns required to be filed (cont.): 
  
           Alcoholic Beverage Tax 
  
             (1) B-C-775 – Spirituous Liquor Return by ABC Boards 
             (2) B-C-786 – Fortified & Unfortified Wine Excise Tax Return Wineries and 
              Wine Shipper Permittees 
             (3) B-C-784 – Fortified & Unfortified Wine Excise Tax Return 
             (4) B-C-710 – Beer Excise Tax Return 
 
           Tobacco Products Tax 
 
             (1) B-A-5 – Monthly Return of Resident Cigarette Distributor 
             (2) B-A-6 – Monthly Return of Nonresident Cigarette Distributor 
             (3) B-A-101 – Monthly Other Tobacco Products Excise Tax Return 
 
           Motor Fuels Tax 
 
             (1) Gas-1202 – Motor Fuels Supplier Return 
             (2) Gas-1252 – Alternative Fuels Provider Return 
 
           Insurance Premium Tax 
 
             (1) IB-33 – Summary of Insurance Premium Tax Filing Return 
             (2) IB-93 – Additional Local Fire & Lightning Tax Return 
                                                              th
             (3) IB-34 – Installment Payments Return – April 15  
                                                              th
             (4) IB-35 – Installment Payments Return – June 15  
                                                                       th
             (5) IB-36 – Installment Payments Return – October 15  
             (6) IB-43 – Self-Insured Workers’ Compensation Premium Tax Return 
                                                              th
             (7) IB-44 – Installment Payments Return – April 15  
                                                              th
             (8) IB-45 – Installment Payments Return – June 15  
                                                                       th
             (9) IB-46 – Installment Payments Return – October 15  
             (10) IB-53 – Gross Premium Tax Return Self-Insured Workers’ Comp 
                                                              th
                  (11) IB-54 – Installment Payments Return – April 15  
                                                                th
             (12) IB-55 – Installment Payments Return – June 15  
                                                                         th
             (13) IB-56 – Installment Payments Return – October 15  
             (14) IB-63 – Gross Premium Tax Return HMO 
                                                                th
             (15) IB-64 – Installment Payments Return – April 15  
                                                                th
             (16) IB-65 – Installment Payments Return – June 15  
                                                                  th
             (17) IB-66 – Installment Payments Return October 15  
             (18) IB-73 – Gross Premium Tax Return Hospital or Dental Service  
                                                                th
             (19) IB-74 – Installment Payments Return – April 15  
                                                                th
             (20) IB-75 – Installment Payments Return – June 15  
                                                                         th
             (21) IB-76 – Installment Payments Return – October 15  
             (22) IB-83 – Gross Premium Tax Return Risk Purchasing Group 
              
                                      7

Returns NOT required to be filed:
                                                      
            Withholding Tax 
 
            (1) NC-5P – N.C. Income Tax Withholding Payment Voucher 
            (2) NC-5 – Employer’s Report of N.C. Income Tax Withheld 
 
 Note:  You will continue to file Forms NC-3, NC-3M or NC-3A, Employer’s 
Annual Reconciliation of North Carolina Income Tax Withheld. Semi-weekly filers 
must also file Form NC-5Q, Quarterly Income Tax Withholding Return. Liabilities 
discovered as a result of completing the NC-5Q should be remitted by check 
accompanied by a NC-5P. 
 
  Corporate Tax 
  
            (1) CD-429 – Corporate Estimated Income Tax Voucher  
 
            Note: Extensions with payments and tax liabilities due on the final return 
for the Corporation must be paid by check, not by EFT.  
 
Taxpayers receiving these non-required coupons or reports after enrolling in the EFT 
Program should not send in the coupon/report after the EFT payment has been made.  
The payment information accompanying these funds transfers constitutes the filing of 
the return for these tax types. For all other tax schedules, refer to the appropriate 
General Statute for filing requirements. 
 
                                 PENALTIES 
 
If an EFT payment is not timely made or if the required tax return is not filed by the due 
date, the provisions for late payment penalties, late filing penalties, and interest will be 
assessed under the applicable provisions of the North Carolina Revenue Laws. 
 
If taxpayers are required to make tax payments by EFT, but remit payment in another 
form, i.e., check, money order, or cash, a penalty of 5% of the amount of tax (maximum 
penalty $1,000.00) will be assessed as provided for in General Statute 105-236(1b) of 
the North Carolina Revenue Laws. 
 
If a transfer cannot be completed as a result of insufficient funds or the nonexistence of 
an account, a penalty for bad electronic funds transfer will be assessed equal to 10% of 
the amount of tax (maximum penalty $1,000.00) as provided for in General Statute 105-
236(1a) of the North Carolina Revenue Laws. 
 
                                         8

                              CORRECTIONS 
 
If an error in communicating payment information is discovered on a subsequent day, 
contact the EFT Helpline for instructions on  how to make the correction.  If the tax 
liability has been overpaid, the taxpayer may request a refund or the overpayment be 
applied toward the liability for the next reporting period.  Refunds will not be made 
electronically; existing procedures for refunds will be followed. 
 
If the tax liability has been underpaid, an EFT representative will  provide payment 
instructions for the additional amount due. 
 
                              EMERGENCIES 
 
Should an emergency arise which prevents a payment from being transmitted by the 
method of transfer for which the taxpayer is approved, call the EFT Helpline.  Specific 
instructions for making the tax payment will be given. 
 
                              CHANGES 
 
If any information has changed since previously registering for EFT, such as banking 
information, contact person, or contact information, a new EFT-100 or EFT-100S form 
should be completed, signed, and submitted  to the EFT Section with the updated 
information.  To avoid payment posting delays or payment posting errors, indicate the 
date the changes should take effect.  Normally, bank changes require 2-3 business 
days to be processed before a payment can be made. 
 
                         TAXPAYER ASSISTANCE 
 
Should you have  questions about the EFT Program or        need assistance in making 
electronic funds transfers, please contact the EFT Helpline in the Raleigh area at (919) 
733-7307 or toll free at 1-877-308-9103 Option 1 then Option 1 again from 8:00 a.m. to 
5:00 p.m., Eastern Time, Monday-Friday. 
 
General information concerning North Carolina taxes, tax forms, and other Electronic 
Services, are also available on the Department’s website:  www.dornc.com. 
 
Further information concerning Streamlined  Sales Tax is available on the national 
website for Streamlined Tax:  www.streamlinedsalestax.org.   To volunteer and register 
through the Streamlined Central Registration:  visit www.sstregister.org/sellers.  
 
 The Department of Revenue has printed 1,000 copies of this public document at a cost of $112.08 or $.11 per 
 
                                            9