North Carolina sales tax guide

We are glad you’re interested in learning more about North Carolina sales tax (NC). We hope that our guide will help you know what is the current sales tax in North Carolina and how to manage North Carolina sales and use tax. In case you have questions that were not covered here, please contact the 1StopVAT team for timely and professional consultation.

North Carolina state sales tax 101

A sales tax (in other countries referred to as VAT) is a tax charged at the time of purchase of goods or services and paid to the local tax authority. Sales tax North Carolina is administered by the North Carolina Department of Revenue (NCDOR). Similarly to other states, North Carolina sales tax is collected from the purchaser at the point of sale and falls on the final consumer of the product or service.

Becoming a sales tax collector is usually determined by fulfilling one or more criteria described as establishing a nexus or a strong bond with the state. Once a nexus is established, the company becomes responsible for collecting the right amount of sales tax and submitting it to NCDOR. The total sales tax rate North Carolina -based businesses must charge vary based on the location of the sale because an additional local sales tax rate is added to the base sales tax. In addition to the sales tax, North Carolina also required filing the use tax due to North Carolina tax sales -exempt businesses.

Should you register to become sales tax for North Carolina?

In order to begin charging and collecting the correct North Carolina sales tax percentage, your business has to meet three criteria:

▶ Your company has a nexus in North Carolina;

▶ You sell taxable services or goods to North Carolina residents;

▶ Your clients are required to pay sales tax.

Do you have a nexus required to collect sales tax in North Carolina (NC)?

▶ Physical nexus. A business located in the state automatically establishes a bond and has to begin accounting for sales and use tax North Carolina.  

Applicable to remote sellers:

▶ Economic nexus. A company that has sold over USD 100 000 worth of goods or services in 200 transactions to customers based in North Carolina in the past or current calendar year has to become a sales tax collector and begin charging an applicable North Carolina state sales tax rate. The nexus is also relevant when sales are made through an online marketplace.

▶ Click-through nexus. The nexus is established if a company collaborates with a North Carolina-based person or a business that refers potential buyers to the company via a website or a link and such activity exceeds USD 10 000 in gross receipts in the last twelve months.

▶ Inventory in North Carolina. If you store your goods in the state, including Amazon-owned storage facilities, you might need to register as a sales tax collector.

Do you sell taxable items?

Before learning what’s the sales tax in North Carolina that you should apply to your goods or services, it is worth checking if the items you sell are taxable. Generally, all physical items should include North Carolina sales tax rates in their prices. There are several exceptions on medicine, groceries and gasoline.

Services are generally non-taxable. However, NCDOR provides a list of exemptions that includes various repairs, item installation and other services.

North Carolina sales tax registration

Companies can register for North Carolina sales tax online or in person at one of the North Carolina Department of Revenue (NCDOR) field offices. Most companies can register online instantly. Using the NCDOR website, they can also learn how much is the sales tax in North Carolina they should add to their prices and what is the applicable filing period. The website can also be used for filing and remitting the sales tax.

What is the sales tax rate in North Carolina?

The total North Carolina sales tax rate consists of the general and local rates. To calculate how much sales tax in North Carolina you should collect, you must know the local sales tax rate of the sale‘s location.

The base sales tax rate in North Carolina is 4.75 %. Local sales tax rates that include city and county rates range from 0 to 2.75 %. Therefore, the maximum sales tax percentage you could charge is 7.5 %.

If you have additional questions about sales tax rates North Carolina, please use our Sales Tax Calculator or contact our team.

Collecting and filing the sales tax

The bigger the business, the more frequent the filing period is usually assigned by the NCDOR. Companies typically file and pay sales tax monthly or quarterly. Monthly North Carolina sales tax returns and payments are due on the 20th day of the month and quarterly – the last day of the month following the reporting period.

Sales Tax rates by states