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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 transmission builder establishes nexus.

According to a 2004 North Carolina administrative decision, an out-of-state company that sold specialty automobile racing transmissions to North Carolina customers has established nexus due to its ownership of property stored in North Carolina. Transmissions that were sold to North…

North Carolina refinishing and manufacturing company does not qualify for exemption.

A North Carolina company whose business is comprised of 80% resurfacing and 20% new fabrication of metal cylinders used in printing did not qualify for the exemption granted to manufacturers. The Assistant Secretary concluded that the resurfacing service did not…

North Carolina ruled that an office equipment supplier did not owe tax on the cost of materials used in fulfilling maintenance agreements.

Systel Business Equipment Company, Inc. was collecting and remitting sales taxes on revenue made from selling optional maintenance agreements to clients who owned their own machinery or leased it from a third party. When service was required, Systel provided the…

North Carolina institutes use of SSTP certificate of exemption.

Effective January 1, 2005, resale or other exempt purchases should be supported by a new certificate: Form E595E. The use of other specific forms will be discontinued as of January 1, 2005. These forms include, but are not limited to:…

North Carolina change in electricity rate.

A 2.83% sales tax rate that applies to manufacturer’s purchases of qualified electricity replaces the current graduated rate and is now effective as of October 1, 2004. With this repeal of the 2001 provision on the reduction of tax rates…

North Carolina announces sales tax holiday.

From Friday, August 6th, through Sunday, August 8th, clothing, footwear, and school supplies costing $100 or less per item, athletic equipment costing $50 or less per item, and computers costing $3,500 or less per item will be exempt from North…

Pre-stamped stuffed envelopes subject to use tax in North Carolina.

An independent franchisee purchased envelopes containing advertising coupons and fliers, which were assembled in another state, from its franchisor. The franchisee distributed the envelopes to customers it had solicited in North Carolina. Using the true object test, the Department determined…

North Carolina explains new exemption certificate.

Following the provisions of the Streamlined Sales Tax Agreement, North Carolina will use a new exemption certificate, Form E-595E effective January 1, 2005. The new certificate is required for purchases for resale or other North Carolina sales or use tax-exempt…

In North Carolina failure to collect tax is no excuse.

North Carolina recently upheld the law that a taxpayer is responsible for remitting the proper amount of tax due even if the taxpayer fails to collect it from its customer in a case involving the rental of portable toilets. North…

North Carolina use tax applicable for advertising coupons mailed into the state

An independent franchisee that publishes, prints, and assembles envelopes with advertising coupons and then mails them into North Carolina to potential customers was found liable for use tax on tangible personal property. The taxpayer argues that only non-taxable advertising services…

North Carolina photographs delivered via Internet not taxable, delivered via tangible media taxable.

A North Carolina photographer transferred commercial photographs to clients both over the Internet and on paper. The taxpayer was not subject to collection of sales tax on the photographs delivered via the internet because the items transferred were not in…

North Carolina taxes delivery charges.

According to statute, as recodified and rewritten effective January 1, 2004, the definition of sales price includes delivery charges. Even if separately stated, delivery charges are subject to sales tax. However, separately stated charges for installation services are excluded from…

North Carolina includes creative design charges as taxable.

A taxpayer sold trade booths, displays, and printed material and also performed creative services for clients. The department ruled that taxpayer’s charges for creative services and design labor constituted part of the sales price of the tangible personal property sold,…

North Carolina log cabin kit subject to use tax.

In a review by the Assistant Secretary of Revenue of North Carolina, taxpayers challenging their liability to pay use tax on a log cabin kit purchased from outside of North Carolina were denied. The taxpayer did not argue that the…

North Carolina Modular Home Sales Explained.

The manufactured home classification will no longer apply to modular home sales in North Carolina. As of January 1, 2004, the sale of a modular homes will have an applicable sales tax rate of 2.5%. Also, the tax will have…

North Carolina reduced manufacturing rate not applicable.

A North Carolina retailer was operating business under the assumption that the work his company did was considered manufacturing and was therefore allowed the 1% reduced sales tax rate. However, since this equipment was purchased for the rebuilding of race…

North Carolina enacts sales tax holiday.

North Carolina has an enacted a sales and use tax holiday effective from August 1, 2003 through August 3, 2003. Items which are to be exempt are clothing, footwear, and school supplies under $100. Sporting goods are also exempt as…

North Carolina mail-order sales.

Recently, an out-of-state company who was sending catalogs to North Carolina for the purpose of advertising its videos and then filling orders placed by North Carolina residents was determined not to have established nexus in North Carolina due to the…

In North Carolina, canned software licenses taxable.

Upgrade licenses for canned software in the state of North Carolina are subject to sales tax. Since the fees paid constituted a lease of tangible personal property, North Carolina sales tax was applicable. The taxpayer, in this particular case, argued…

North Carolina shareholders were “engaged in business” with lease.

The shareholders of a corporation in North Carolina that purchased heavy equipment and then leased it back to the corporation were considered “engaged in business” because rent payments were taken and tangible personal property was maintained for the purpose of…

North Carolina tax increase.

Legislation has been passed by the North Carolina General Assembly authorizing all counties to levy an additional .5 % local option sales and use tax beginning on December 1, 2002. Most counties had adopted the levy by December 1, 2002,…

North Carolina states that rebuilding engines does not qualify for manufacturing exemption.

The repair parts were purchased by the taxpayer exempt from sales tax, since the engine was for resale. However, the taxpayer was not a manufacturer because he did not manufacture new and different products for sale. Therefore, the taxpayer was…