Privilege License: Questions Answered

NASW-NC has been made aware that several social workers have called the North Carolina Department of Revenue and have received conflicting information about the Privilege License.

NASW-NC has spoken with the North Carolina Department of Revenue Excise Tax Division, the Division that oversees the Privilege License and we have 100% confirmed the following:

1. In the state of North Carolina, Licensed Clinical Social Workers who practice clinical social work independently (in their own private practice and not for an organization or for another person’s private practice) for a fee must obtain an annual “privilege” license with the state. The privilege license tax is an annual tax and is due by July 1 of each year to the North Carolina Department of Revenue that gives the privilege of going into business/opening a business.

2. Licensed Clinical Social Workers who practice independently for a fee for their clinical social work services file for their Privilege License under the category of “Art of Healing”.

    

   Definition of Art of Healing:

    

   North Carolina Gen. Stat. § 105-41(a)(2) provides in part, that a “…person who practices a professional art of healing”, must procure from the North Carolina Department of Revenue (Department) a statewide privilege license and pay for such license a tax of fifty dollars ($50.00) annually. While the occupation of “licensed clinical social worker” is not specifically listed in N.C. Gen. Stat. § 105-41(a)(2), a “licensed clinical social worker” does practice the “professional art of healing.”

    

   The North Carolina Court of Appeals has defined the terms “professional art” and “healing” as they pertain to the privilege license requirement. In the case of Smith v. Keator, the North Carolina Court of Appeals determined that for purposes of North Carolina Gen. Stat. § 105-41, the term “professional” art meant a skill requiring “knowledge of advanced type in a given field of science or learning gained by a prolonged course of specialized instruction and study.” Smith v. Keator, 21 N.C. App. 102, 105 (1974), citing Paterson v. University of the State of New York, 14 N.Y.2d. 432, 437 (1964). The Court also defined “healing” to mean, “the curing of diseases or injuries”. Smith v. Keator, 21 N.C. App. 102, 105 (1974).

    

   Definition of Clinical social work practice NC 90b-(3)(6) - The professional application of social work theory and methods to the biopsychosocial diagnosis, treatment, or prevention, of emotional and mental disorders. Practice includes, by whatever means of communications, the treatment of individuals, couples, families, and groups, including the use of psychotherapy and referrals to and collaboration with other health professionals when appropriate.

    

   Based on the required knowledge and skills to practice clinical social work and the diagnostic and therapeutic nature of the work, the Department concludes Licensed Clinical Social Workers are engaged in the professional art of healing.

    

3. Social workers who do not need a Privilege License:

   1. Licensed Clinical Social Workers who practice for an organization, company or under another taxpayer’s business and are compensated by the company do not need to obtain the Privilege License.

   2. A License Clinical Social Worker practicing the professional art of healing for a fee or reward and whom is an adherent of an established church or religious organization and confines the healing practice to prayer or spiritual means (G.S. 105-41(b)) does not need to obtain the Privilege License.

   3. Any social worker providing social work services for a fee but not practicing clinical social work does not need to obtain the Privilege License.

Learn more information about the Privilege License for Licensed Clinical Social Workers can be found here: https://www.naswnc.org/PrivilegeLicense

NASW-NC members can contact Valerie Arendt with general questions. This is general guidance. NASW-NC does not provide legal or accounting advice. Please contact your business attorney or accountant for this information.