North Carolina is a destination-based state (sales are taxed where the buyer is located).
Businesses may file online or by mail. Form E-500 is available:
North Carolina's sales tax rate is 4.75% plus applicable local rates. Check the totals by county.
The below items are subject to a 7% combined general rate:
The retail sale of a boat is taxed at 3% with a maximum tax of $1,500 per article.
The 4.75% general sales rate tax plus local tax is charged on “non-qualifying food” which includes prepared foods and beverages in restaurants, dietary supplements, food sold through vending machines, bakery items sold with eating utensils, soft drinks, and candy.
A reduced 2% local tax rate is charged on “qualifying food” which includes groceries and bakery items sold without eating utensils.
Nexus is determined in North Carolina by the state’s Doing Business Rule (North Carolina's Doing Business Rule, 17 NCAC 5C .0102).
In general, the conditions for establishing nexus include:
Your filing frequency will be determined based on your monthly tax liability as follows:
After your application is processed, you’ll be mailed a Sales and Use Tax Account ID and pre-printed forms on which to report your sales and use tax and submit with your payment, if you choose to file and pay by mail. The Department of Revenue will also mail a Certificate of Registration that is required to be displayed at your place of business.
If tax is due, both a "failure to file" penalty of 5% per month and a "failure to pay" penalty of 10% is charged. Interest is due on the amount of tax due from the date the tax was due until it is paid.
If no tax is due, penalties and interest are not due but the return must be filed.