North Carolina state seal

North CarolinaSales Tax

A Complete Guide For Businesses

Automate My North CarolinaSales Tax Filings

State Rate
4.75%

Local Tax
yes

Phone
(877) 252-3052

General requirements

North Carolina is a destination-based state (sales are taxed where the buyer is located).

  • Sales tax is charged on the gross receipts of the retail sale or lease of tangible personal property (TPP), certain digital property, and certain services
  • For manufacturers, purchases used for production aren’t taxed
  • For distributors, items purchased for resale aren’t taxed

Businesses may file online or by mail. Form E-500 is available:

  • Online
  • By mail
  • By calling the Taxpayer Assistance and Collection Center at 1-877-252-3052

Rates

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:

  • Telecommunications Service and Ancillary Service
  • Video Programming Service
  • Spirituous Liquor
  • Electricity
  • Piped Natural Gas
  • Aviation Gasoline and Jet Fuel

The retail sale of a boat is taxed at 3% with a maximum tax of $1,500 per article.

For a fast and accurate sales tax rate lookup by zip code, use our up-to-date calculator below.

Look up your North Carolina sales tax rate:

How food is taxed

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 in North Carolina

Nexus is determined in North Carolina by the state’s Doing Business Rule (North Carolina's Doing Business Rule, 17 NCAC 5C .0102).

Business activities that establish nexus in North Carolina include:

  • Maintaining an office or other places of business in the state
  • Maintaining inventory, whether in a warehouse or otherwise, in the state
  • Selling or distributing from a company-owned vehicle in the state
  • Owning, renting, or operating income-producing properties in the state
  • Having an employee working out of the office of another company in the state

Read more about nexus in North Carolina.

Filing schedule

Your filing frequency will be determined based on your monthly tax liability as follows:

  • Quarterly filers: If your tax liability is consistently less than $100 per month
  • Monthly filers: If your tax liability is consistently more than $100 but less than $20,000 per month
  • Monthly filers with pre-payment for the next month’s tax liability: If your tax liability is at least $20,000 a month (monthly with prepayment returns are required to be filed online)

Registering to collect sales tax in North Carolina

You may obtain a sales tax account number by registering online or submitting a Business Registry Application by mail.

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.

Penalties

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.

We try our best to keep these guides up-to-date. If any of this information is no longer accurate, or if you'd like us to add something new, please email corrections and suggestions to support@lumatax.com. We love hearing feedback!