North Carolina Repeals Transaction Count from Economic Nexus Threshold

Effective July 1, 2024, North Carolina has enacted legislation that repeals the 200-transaction count from its economic nexus threshold for remote sellers. Effective July 1, 2024, the state’s remote seller thresholds for economic nexus are as follows:

• The retailer makes gross sales in excess of $100,000 from remote sales sourced to North Carolina, including sales as a marketplace seller, for the previous or the current calendar year.
• The retailer is a marketplace facilitator that makes gross sales in excess of $100,000, including all marketplace-facilitated sales for all marketplace sellers, from sales sourced to North Carolina for the previous or current calendar year.

The change to the economic nexus threshold could result in some remote sellers being eligible to cancel their North Carolina sales tax registration. Per guidance from the North Carolina Department of Revenue, a remote seller may cancel its North Carolina sales tax registration if it meets the following requirements:

• Did not make gross sales (including all sales as a marketplace seller) sourced to North Carolina of more than $100,000 during 2023. If the retailer is a marketplace facilitator, gross sales include marketplace-facilitated sales for all marketplace sellers.
• Did not make gross sales (including all sales as a marketplace seller) sourced to North Carolina of more than $100,000 from January 2024 through the date it cancels its registration in 2024. If the retailer is a marketplace facilitator, gross sales include marketplace-facilitated sales for all marketplace sellers.
• Is not otherwise engaged in business in North Carolina.

If a remote seller meets all of the above criteria, it may choose to cancel its sales tax registration or remain registered. However, the remote seller must continue to collect and remit sales and use tax and file returns until it cancels its registration. To cancel its registration, the remote seller must file Form NC-BN (Out-of-Business Notification), which can be found at www.ncdor.gov.

The Remote Seller must list the date it wishes to end its registration in the space provided for “Date of Permanent Closure.” The date must be on or after the date the form is filed. If a remote seller cancels its sales tax registration and later becomes engaged in business in North Carolina, it must re-register with the Department of Revenue and resume filing returns and collecting and remitting sales and use tax.

North Carolina’s repeal of the transaction count from its economic nexus threshold is the latest in a trend of states (including Indiana, Louisiana, and Wyoming, among others) that have done the same. Remote sellers who are currently registered for sales tax in North Carolina will want to review their sales into the state to see if they are eligible to cancel their sales tax registration.

To view our prior tip on the enactment of North Carolina’s original economic nexus legislation, visit North Carolina Imposes Economic Nexus Threshold. (H.B. 228; SD-24-1 – Remote Sales – Repeal of Transaction Thresholds)