Back to Sales Tax Updates

North Carolina Sales Tax

On this page you will find handy sales and use tax information about North Carolina.

How to use this page:

We’ve pulled in the information from all our Charts for a consolidated view by state.  Here you can see the sales tax rates and if the state has remote seller nexus rules. You can also see any sales tax holidays or amnesty programs that may exist, though these do not apply to all states.

Below the chart you can find any News & Tip item we have published that relates to North Carolina that you can filter by topic. This will help you get informed on current and past legislation that has passed in the state.

State Sales Tax Rates
State Rate

4.750% The state has reduced rates for sales of certain types of items.
Range of Local Rates

2% – 4.25%
Local Rates Apply to Use Tax

Yes
Remote Seller Nexus Rules
CLICK-THROUGH NEXUS

8/7/2009
ECONOMIC NEXUS

11/1/2018 (updated 7/1/2024) – see state notice

New threshold: July 1, 2024

 
MARKETPLACE NEXUS

2/1/2020

New threshold: July 1, 2024
Sales Tax Amnesty
Status

Inactive

Amnesty Filing Dates

April 23, 2010 - June 30, 2010

Go to North Carolina Amnesty Page
AMNESTY INCLUSION PERIODS

Tax, penalties or interest for periods prior to September 1, 2010.

TAX TYPES AND CONDITIONS

Business Sales and Use Tax, Business must register to collect and remit sales and use tax for 4 years, beginning September 1, 2010.
AMNESTY BENEFITS

Tax, penalties or interest for periods prior to September 1, 2010 waived.

Administration Information
Streamlined Sales Tax Status

Full Member
NUMBER OF TAXING AUTHORITIES

106 Sales Tax Jurisdictions
HOME RULE AUTHORITIES

N/A
Sales Tax Sourcing (Intrastate)

Destination
Sales Tax Return Due Date

Monthly filers: 20th of month following reporting period. Quarterly filers: last day of month following quarter.
Exemption Information
RESALE CERTIFICATE

North Carolina Resale Certificate
TYPES OF EXEMPTIONS

Product types of exemptions: prescription medications, some types of groceries, some medical devices, and machinery and chemicals which are used in research and development; mill machinery, machinery parts and manufacturing accessories

 

Entity types of exemptions: qualifying farmers or conditional farmers; commercial fishermen; loggers; veterinarians; accepted wastewater dispersal system; state agencies; U.S. government

 

North Carolina Exemption Certificate Forms
History & Fun Facts
HISTORY

  • North Carolina originally imposed sales tax in 1933 to provide emergency revenue for public schools in place of property taxes. The sales and use tax currently used was enacted in 1957.
  • North Carolina enacted legislation in 2001 to conform its laws to the Streamlined Sales and Use Tax Agreement and furthered its commitment to conformity in 2005.
FUN FACTS
  • North Carolina imposes a white goods disposal tax, applicable to “white goods” such as refrigerators, ranges, water heaters, freezers, unit air conditioners, etc., effective January 1, 2015. A real property contractor must pay a $3.00 white goods disposal tax at the time of purchase of a new white good to a retailer engaged in business in North Carolina or accrue and pay the tax on a new white good purchased outside North Carolina for storage, use, or consumption in the state.

North Carolina Governor Signs Budget that Includes Amazon Provision

Under the provision, a retailer is presumed to engage in business in North Carolina if the retailer has an agreement with a resident under which the resident refers potential customers, usually with a link, to the retailer.

North Carolina Temporarily Increases Sales and Use Tax Rate

North Carolina Governor Bev Perdue has signed a budget that temporarily increases the general state sales and use tax rate from 4.5% to 5.5%. The 1% increase will be applicable to sales made on or after September 1, 2009 and…

North Carolina Trial Court Incorrectly Applied Inappropriate Standard of Review

A North Carolina trial court incorrectly applied a de novo standard of review to overturn the Tax Review Board and Assistant Secretary of Revenue’s determination that a taxpayer was not a charitable organization, and therefore was not entitled to a…

Online Retailers Targeted by North Carolina Legislation

A bill that would enact a presumption of nexus for certain online retailers and extend the sales and use tax to digital products has been introduced in the North Carolina Senate on March 9, 2009. The legislation is basically identical…

North Carolina Taxes Were Not Underpaid by Online Travel Companies

The U.S. District Court found that online travel companies (“OTCs”)did not underpay North Carolina local occupancy taxes. It was agreed that they are not hotel operators for purposes of the state sales tax. North Carolina sales tax is only applicable…

North Carolina Department of Revenue Discusses Exemption for Sales of Baked Goods

The North Carolina Department of Revenue announced that, effective January 1, 2009, there will be a new exemption from State sales and use tax for bakery items which are sold without eating utensils by an artisan bakery. These items include…

North Carolina Alters Assessment Review Procedures

North Carolina altered the procedure for taxpayer objections to proposed refund or assessments issued by the Department of Revenue. The new rules state that if a taxpayer disagrees with the Department’s proposed actions, they must file a request for review…

Items Sold at North Carolina Convenience Stores with Restaurants are Taxable

Any food, non-food and prepared food items, including soft drinks, which are sold at convenience stores that have a connected restaurant are subject to sales and use tax.

North Carolina Cost-Per-Copy Optional Maintenance Fees Exempt

A North Carolina taxpayer who entered into optional maintenance agreements with customers on a cost-per-copy basis was not liable for sales tax. Since the cost-per-copy optional maintenance fee charged by the customer did not represent the sale of tangible personal…

North Carolina Combined General Rate Increased

Effective April 1, 2008, the combined general rate of North Carolina sales and use tax is increased from 6.75% to 7%. The combined general rate (to include county rates) applies to the gross receipts derived from providing telecommunications service, ancillary…

North Carolina’s Sales Tax Rate Increase Permanent, Others to Follow

Effective July 31, 2007, the extension of North Carolina’s temporary 0.25% increase in the state sales and use tax (which was scheduled to expire on August 1, 2007), has been permanently extended. Furthermore, effective October 1, 2008, the general state…

North Carolina Governor Signs Temporary Rate Extension Bill

Governor Mike Easley signed a bill which temporarily extends the 0.25% provisional rate increase until August 1, 2007. Previously, the rate increase was set to expire on June 30, 2007. In addition, all retailers that make a good faith effort…

Purchase of Ad Circulars Taxable in North Carolina

A North Carolina tax hearing found that circulars distributed by a taxpayer were subject to sales and use tax. The taxpayer argued that the circulars did not constitute tangible personal property because they were distributed free to the public qualifying…

In-State Delivery and Installation Created Nexus in North Carolina

A North Carolina tax hearing found that a taxpayer who made sales to North Carolina residents had nexus in the state and was subject to tax. The taxpayer was not previously registered in North Carolina, but made sales that included…

North Carolina Issues Guidance Regarding Tax Rate Decrease

To address issues associated with the recently enacted tax rate decrease in North Carolina, the state has released a set of guidelines outlining the treatment of transactions occurring during the change. The state enacted legislation, effective December 1, 2006, that…

North Carolina Privilege Tax Imposed on Mill Machinery

A North Carolina privilege tax has been imposed on the purchases of mill machinery and related parts or accessories for use, storage, or consumption by a manufacturing industry or plant. The tax also applies to contractors or subcontractors whose purchases…

North Carolina Authorizes Sales Tax Holiday

The State of North Carolina will exempt select items from sales and use tax beginning on the first Friday of August and ending the following Sunday. Clothing retailed at one-hundred dollars or less qualifies for the exemption. In addition, sports…

Construction Materials Assembled Out-of-State Are Subject to North Carolina Use Tax

The North Carolina Court of Appeals ruled that tangible personal property procured outside the state, such as building components, is subject to use tax when it becomes part of a building or structure in North Carolina. Materials are not exempt…

North Carolina Exempts Services Related to Funerals

Effective January 1, 2006, North Carolina will not tax funeral services. Examples of exempt services include those provided by ambulance, morticians, undertakers, beauticians, and barbers. Tangible personal property related to funerals, such as coffins, caskets, vaults, and memorial stones, however,…

North Carolina: Administrative Decision on Mapping Services.

North Carolina ruled that a taxpayer’s purchase of tangible personal property used to provide mapping services (film, negatives, etc.) by its land surveying company was subject to state use tax. The taxpayer argued that the items purchased were used to…

North Carolina Extends Tax Rate

While considering whether or not to make the additional % sales and use tax rate permanent, the North Carolina General Assembly has enacted legislation that establishes a short-term extension of the tax. The additional tax was going to originally expire…

North Carolina sales tax holiday: Aug. 5 – Aug. 7, 2005

Clothing, footwear and school supplies less than $100. Sports and recreation equipment less than $50. Computers less than $3,500. Excludes accessories, cosmetics, furniture, rentals and commercial use items. See Details

North Carolina Reduce State Sales Tax Rate DELAYED.

The rate reduction that was scheduled to be effective July 1, 2005 has been delayed.

North Carolina Enacts Computer Manufacturing Incentives

In a special session, the North Carolina General Assembly passed legislation for a computer manufacturer credit that also enhances existing tax credits. The sales and use tax refund under this legislation was previously only available to pharmaceutical and medicine manufacturers.…