Direct Pay Permits

General Definition
Of A Direct Pay Permit

Upon approval of an application to a state, a direct pay permit is issued to a company that purchases tangible personal property whose tax status cannot be determined at the time of purchase for one of the following reasons:

  • The place of business where the property will be used is not known at the time of purchase, or
  • The manner in which the property will be used is not known at the time of purchase
The use of a direct pay permit does not mean that the company is tax exempt. It simply means the sales or use tax is deferred. Therefore, a company issues a copy of its direct pay permit(s) to its vendors to instruct the vendors to exclude sales tax on invoices at the time of purchase. If the items/services being purchased are taxable, the Sales Tax/GL systems accrue the appropriate use tax. The company then pays the accrued use tax directly to the state when the company files its sales tax return.
  • Direct pay permits should not be used for "P-card" or corporate credit card purchases.
  • Use direct pay permits only for the entity to which it was issued.
  • Use contractor's letter when construction contractors are furnishing exempt processing machinery (applicable to NC, SC & FL).
Access copies of Duke Energy and its affiliate's Direct Pay Permits.

Notice

Piedmont Natural Gas, a subsidiary of Duke Energy, values the work we do with your company. Since Piedmont was acquired by Duke Energy, we have been transitioning to various processes and policies. As part of that transition, beginning Jan. 1, 2020, Piedmont will begin operating under Duke Energy's Direct Pay Permit (DPP) policy, which affects the company's payments of sales tax to vendors. We have summarized the policy, as well as an overview of upcoming changes that may impact your company's invoices to Piedmont Natural Gas and/or Duke Energy.


Direct Pay Permit Summary

In taxing jurisdictions where Piedmont Natural Gas has a DPP, the company is permitted to accrue sales/use tax charged by vendors and pay the taxes directly to the jurisdictional authority (e.g., Department of Revenue). In these situations, vendor invoices are short-paid for amount of the sales tax charged. While the DPP policy applies to most vendors that have charged or will charge Duke Energy sales tax, there are some notable exceptions, as follows:
  • Purchases made with a company charge card or cash
  • Purchases which fall into the following categories:
    • Fuels and natural gas purchases
    • Vehicle tax/title/tag purchases
    • Benefits
    • Catering purchases
    • Lump sum contracts
    • Telecom services
    • Utilities
  • Reimbursement to Alliance Distribution Contractors for the payment of taxes paid on materials used for pipeline construction
Note that for the exceptions listed above, Piedmont Natural Gas will continue to pay all applicable sales tax charged on the invoice or at the point-of-sale.

Change Impact & Actions Required

Beginning in January 2020, Piedmont Natural Gas will utilize a tool to automate the DPP policy via systematically short-paying applicable invoices (i.e. invoices with sales tax that do not fall into an exception category).

We appreciate your attention to this change in the coming months, especially with regard to invoices that may contain taxable goods or services. You may also need to evaluate your company's practices around remittance of sales tax to the jurisdictional authority prior to receiving payment on a Piedmont Natural Gas invoice. In these situations, when Piedmont Natural Gas has short-paid an invoice for the amount of the sales tax, it may be necessary to request funds back from the jurisdictional authority via a credit or refund to avoid double-payment of sales tax.

As a reminder, all contractors and applicable personnel are responsible for knowing and complying with any Duke Energy-specific policies and requirements made available or provided to the contractor.

Specific questions about DPPs should be directed to our tax specialists at Ernst & Young via email at dukesalestax@ey.com.

Inquiries regarding short-paid invoices can be directed to Duke Energy's Accounts Payable team via email at apquestions@duke-energy.com.

Thank you for your support and patience as we merge our tax processes with the broader company.

Frequently Asked Questions

Piedmont Natural Gas Direct Pay

  • Beginning Jan. 1, 2020, Piedmont Natural Gas, a subsidiary of Duke Energy, will begin operating under Duke Energy’s Direct Pay Permit (DPP) policy, which affects the company’s payments of sales tax to vendors.

  • Beginning in January 2020, Piedmont Natural Gas will use a tool to automate the DPP policy via systematically short-paying applicable invoices (i.e., invoices with sales tax that do not fall into an exception category).

  • Suppliers can review and download copies of the Duke Energy’s, Progress’, and Piedmont’s Direct Pay Permits.

    NOTICE: PNG Direct Pay Permits will be effective on 1/1/2020 and will be available at the above link on that date.

  • Direct Pay Permit renewal is dependent upon the state from which is was issued. However, direct pay permits in North Carolina, South Carolina, and Tennessee do not expire and are valid until revoked by the appropriate Department of Revenue.

  • You may also need to evaluate your company’s practices around remittance of sales tax to the jurisdictional authority prior to receiving payment on an Piedmont Natural Gas invoice.

  • You should first review the Direct Pay Permits available to confirm if your state has issued a Direct Pay Permit to Piedmont Natural Gas. If you confirm that there is not a Direct Pay Permit in place then you should email APQuestions@duke-energy.com.

  • You can reach out to dukesalestax@ey.com. Duke Energy uses EY for tax many tax operations.

  • In these situations, when Duke Energy has short-paid an invoice for the amount of the sales tax, it may be necessary to request funds back from the jurisdictional authority via a credit or refund to avoid double-payment of sales tax.

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