Amends GS 105-164.14 by removing cities and counties from those entities allowed an annual refund of sales tax paid on direct purchases of items.

Amends GS 105-164.13 by exempting from sales tax items that are subject to sales and use tax under GS 105-164.4 (other than electricity, telecommunications service, and ancillary service) if (1) the items are purchased by a county or a city for its own use and in accordance with GS 105-164.29A (tax exemption process), or are purchased by a contractor or subcontractor if the purchase is for use in the performance of a contract with the county or city; (2) the items are purchased pursuant to a valid purchase order issued by the county or city that contains the exemption number of the county or city and a description of the property purchased, or the items purchased are paid for with a county or city-issued check, electronic deposit, credit card, procurement card, or credit account; and (3) for all purchases other than by a county- or city-issued purchase order, the county or city must provide to or have on file with the retailer the county's or city's exemption number.

Amends GS 105-164.29A by making conforming changes.

Effective October 1, 2023, and applies to sales occurring on or after that date. Specifies that the act does not prevent a county or city from requesting a refund for sales and use taxes for purchases made prior to July 1, 2023. Also specifies that the act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended by this act before the effective date of its amendment, nor does it affect the right to any refund or credit of a tax that accrued under the amended statute before the effective date of its amendment.