Total Range for 2025
| Base state sales tax rate | 4.75% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | 0%-2.75% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 4.75%-7.5% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | 20th of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in North Carolina is 4.75%, but since the local rates range from 0-2.75% the total sales tax range is 4.75-7.5%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
If you sell a product for $100 in a location with a combined sales tax rate of 7.25% (4.75% base rate + 2.5% local rate), the sales tax amount would be $7.25 (100 x 7.25%). You would collect $107.25 ($100 + $7.25) from the customer.
Nexus: Why may you need to collect sales tax in North Carolina?
Similar to other states, North Carolina has both physical nexus and economic nexus rules to determine a business’s obligation to collect sales tax:
- Physical Nexus: Having a physical presence in North Carolina, like an office, warehouse, or employees in the state, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within North Carolina exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
In North Carolina, the economic nexus threshold is $100,000 or more of gross sales from deliveries of tangible personal property or services to locations within North Carolina State during the previous twelve months.
Services
- In North Carolina, services typically aren’t subject to taxation.
- However, there are some exceptions. If a service is closely tied to the sale of tangible personal property and the service charge is part of the overall sales price, it may be subject to taxation.
Goods
- The majority of tangible personal property transactions in North Carolina incur taxes. This includes various everyday items like furniture, sporting equipment, etc.
- However, certain exemptions exist, including: Specific unprepared food items (excluding meals from restaurants), prescription drugs and medical devices and sales of agricultural products off-farm by the producer
Freight/Shipping
- If the charges for shipping and transportation are itemized separately on the invoice and not included in the product’s sales price, they are generally exempt from taxation in North Carolina.
- On the other hand, if the shipping and transportation costs are integrated into the product’s sales price and not delineated separately, they are considered taxable along with the product itself.
Clothing
- Clothing is subject to sales tax in North Carolina
Electronics
- In North Carolina electronics are subject to sales tax
SaaS
- SaaS is generally not taxable in North Carolina
Digital Products
- Digital audio works, audiovisual works, ebooks, greeting cards, photographs, and publications are all taxable
Software
- Electronically delivered prewritten computer software falls under tangible personal property and is therefore taxable.
How to Register for Sales Tax in North Carolina
If you’ve determined you need to collect sales tax in North Carolina, registering for a Certificate of Registration is the next step. Here’s how you can do it:
- Online Registration:
The North Carolina Department of Revenue (NCDOR) offers a convenient online registration system through their website. This is generally the fastest and most efficient way to register. Here’s what you’ll need:
- Business name and address
- Contact information
- Federal Employer Identification Number (EIN)
- Business activity start date
- Projected monthly sales and taxable sales
- Products or services offered
- Mail-in Registration:
If online registration isn’t an option, you can also register by mail using a paper application (Form EC-500).
- Download the North Carolina Certificate of Registration application (Form EC-500) from the NCDOR website.
- Complete the form following the instructions provided.
- Mail the completed application form along with any required documentation to the address listed on the form.
Whichever method you choose, make sure to have all the necessary information readily available to ensure a smooth registration process.
Additional Notes:
- You may be required to file a surety bond along with your application, depending on your business type and projected sales tax liability.
- Once your application is approved, you’ll receive a Certificate of Registration with your sales tax permit number. You’ll need this number to collect and report sales tax.
For more detailed information and specific instructions, visit the North Carolina Department of Revenue website or contact them directly.
How to Collect Sales Tax in North Carolina
Once you’ve registered for a Certificate of Registration and received your sales tax permit in North Carolina, here’s what you need to know about collecting sales tax:
- Determine the Tax Rate:
The sales tax rate in North Carolina is a combination of a statewide base rate and potential additional local rates. The base rate is currently 4.75%. However, many counties, cities, and special districts in North Carolina impose additional local sales taxes on top of the base rate.
You can find the specific sales tax rate for the location where your business is located or where you’re delivering goods/services by using the North Carolina Department of Revenue’s Sales and Use Tax Rate Search Tool.
- Apply the Tax Rate:
Once you know the applicable tax rate, simply add it to the taxable sales price of your goods or services to determine the amount of sales tax to collect from the customer.
- Keep Good Records:
It’s crucial to maintain accurate records of your sales and sales tax collected. These records are essential for filing sales tax returns and during any potential audits by the state.
- Report and Remit Sales Tax:
North Carolina businesses are required to file sales tax returns and remit the collected tax on a regular basis. The specific filing frequency depends on your business’s total sales tax liability.
- Generally, businesses with lower sales tax liability will file quarterly, while those with higher liability may need to file monthly.
You can find detailed information on sales tax filing deadlines and remittance procedures on the North Carolina Department of Revenue website or by contacting them directly.
Additional Tips:
- Consider hiring a sales tax wingman to take care of calculations, filing, and remittance, saving you time and ensuring accuracy.
- Stay informed: Sales tax laws and regulations can change, so stay updated on any changes that might affect your business.
How to get a sales tax permit/license in North Carolina?
To obtain a sales tax permit in North Carolina, follow these steps:
- Register Online: Go to the North Carolina Department of Revenue’s website and use the Online Business Registration system. You can access it through the North Carolina Department of Revenue website.
- Provide Required Information: Complete the registration form with details such as your business name, address, Federal Employer Identification Number (FEIN) or Social Security Number (SSN), and information about your business activities.
Once your application is submitted and processed, you’ll receive your North Carolina sales tax permit. This permit allows you to collect sales tax on taxable sales and must be displayed at your business location.
When are North Carolina’s sales tax returns due?
In North Carolina, sales tax returns are due based on your assigned filing frequency:
- Monthly: Returns are due on the 20th day of the month following the reporting period. For example, the return for July is due by August 20th.
- Quarterly: Returns are due on the 20th day of the month following the end of the quarter. For example, the return for the first quarter (January-March) is due by April 20th.
- Annually: Returns are due on January 20th of the following year.
If the due date falls on a weekend or holiday, the return is due the next business day. Timely filing is important to avoid penalties and interest.
You can find a detailed breakdown of filing deadlines based on your filing frequency and registration month on the NCDOR website.
Is anyone exempt from sales tax in North Carolina?
Yes, North Carolina provides several exemptions from sales tax. Key exemptions include:
- Certain Goods and Services:
- Prescription medications and certain medical devices, such as wheelchairs and prosthetics, are exempt.
- Software-as-a-service (SaaS)
- Most food items purchased for home use are exempt from sales tax, although there are exceptions for prepared foods.
- Items used directly in farming, such as feed and seed, are exempt.
- Sales for Resale:
- Purchases made for resale in the regular course of business are exempt if the buyer provides a valid resale certificate.
- Nonprofit Organizations:
- Purchases made by qualifying nonprofit organizations may be exempt from sales tax, provided they present a valid exemption certificate.
- Government Entities:
- Purchases made by federal, state, and local government agencies are typically exempt from sales tax.
Do I Have to Collect Sales Tax from North Carolina Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
No.
North Carolina has a marketplace facilitator law. This means that marketplaces like Amazon and eBay should collect sales tax on behalf of 3rd party sellers on their platforms.
However, if you have a sales tax nexus in North Carolina, remember that you still need to collect sales tax on your other non-marketplace North Carolina sales.
