Ultimate North Carolina Sales Tax Guide

Confused by North Carolina sales tax rules or filing deadlines? 

We'll simplify the process of calculating sales tax in all the counties and cities of North Carolina, as well as address critical questions about collecting sales tax and use tax rates.

But that’s not all.

We’ll also introduce a reliable sales tax solution to ensure you stay compliant throughout your sales tax cycle.

North Carolina Sales Tax Rate Range 2024

North Carolina, United States, has a minimum state sales tax rate of 4.750%. 

Additionally, counties can also levy local sales tax up to 2.750%. For instance, Alamance Village in Alamance County has a sales tax rate of 6.750%. This includes the state sales tax rate of 4.750% and a 2.000% local sales tax. 

How to Calculate Sales Tax in North Carolina

Add the following rates to calculate your sales tax in North Carolina:

• State sales tax
• Local sales tax 

For instance, let's calculate the sales tax rate of Chapel Hill, Durham County:

• North Carolina state sales tax of 4.750%
• Durham County sales tax of 2.250%
• Durham County Transit sales tax of 0.50%

This brings the total sales of Chapel Hill to 7.500%, which is the highest tax rate in the state.

Sales Tax Rates in North Carolina by County

Let’s look at the sales tax rates of a few North Carolina counties:

Next, let’s see how you can collect sales tax in North Carolina.

Collecting North Carolina Sales Tax from Customers

Here are a few questions you may have about sales tax collection in North Carolina.

Do I Have to Collect North Carolina Sales Tax from Customers?

Retailers who meet these two requirements are required to collect sales tax in North Carolina: 

• You have a sales tax nexus in North Carolina.
• You sell taxable products or services in North Carolina.

What Creates a Sales Tax Nexus in North Carolina?

In North Carolina, any retailer who makes a taxable sale and has a nexus must collect sales tax. 

Some factors that create nexus in North Carolina include:

• Economic Nexus: Businesses with taxable sales of more than $100,000, or 200 separate transactions in the past 12 months.

• Physical Location: Businesses having a store, office, warehouse, or other place of business. Selling or distributing taxable items in company-owned vehicles in the state also creates a nexus.

• Employee Location: Businesses with employees in the state.

• Special Events: Businesses that sell taxable goods and services in specialty markets, flea markets, fairs, festivals, sporting events, entertainment events, and other events must register for sales tax.

Learn more about the sales tax nexus and when you’re required to collect 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.

Taxable Products in North Carolina

Most tangible personal property is subject to sales tax in North Carolina. However, some necessities like food, grocery, and medication are not taxable in the state. 

Here’s a run-down of the items taxed in North Carolina.

Are Groceries Taxable in North Carolina? 

No. Grocery items are non-taxable in North Carolina. 

Is Clothing Taxable in North Carolina?

Yes, clothing is taxable in North Carolina.

Are Digital Products Taxable in North Carolina?

Yes, digital products such as e-books or purchased digital movies are taxable in North Carolina.

Is Software-as-a-Service (SaaS) Taxable in North Carolina?

No. SaaS is non-taxable in North Carolina. 

Are Services Taxable in North Carolina?

While most services enjoy a sales tax exemption in North Carolina, the following services are subject to sales tax: 

• Admission charges to entertainment activities
• Dry cleaning and laundry services
• Prepaid telephone calling services
• Repair, maintenance, and installation services
• Satellite digital audio radio services
• Service contracts
• Telecommunications and related services
• Video programming services

Tax-Exempt Items

Some of the tax-exempt items in North Carolina are:

• Products of forests and mines sold in their original or unmanufactured state.
• Sales of commercial logging machinery, its parts, lubricants, and fuel.
• Sales of mill machinery, mill machinery parts, or accessories to a manufacturing plant or contractor. 
• Medical equipment like prosthetic devices, durable medical supplies, and over-the-counter drugs sold on prescription.  
• Sales of diapers or incontinence underpads sold on prescription by an enrolled State Medicaid provider to beneficiaries of the State Medicaid program.
• The lease or rental of films, motion picture films, transcriptions, and recordings to radio stations and television stations that have the exemption certificate from the Federal Communications Commission.
• Food and prepared food sold within the school building during regular school hours.
• Tangible personal property purchased for exporting to a foreign country for exclusive use or consumption in other countries.

But to collect sales tax, you need a seller’s tax permit. Let's explore how you can get one.

How to Register for a North Carolina Seller's Permit

You can register for a North Carolina seller's permit online at the North Carolina Department of Revenue.

Learn how to register for a seller's permit in every US state.

Do I Need a North Carolina Sales Tax License if I’m Only a Wholesaler? 

If you’re a wholesaler, you should register and obtain a Certificate of Registration before engaging in business in North Carolina. 

If you don’t make taxable retail sales or purchases, you can just select "wholesale only" when registering for sales tax, and you’ll be exempt from sales and use taxes. 

Do I Need a North Carolina Seller's Permit if I Only Sell Temporarily in the State?

Yes. 

North Carolina requires retailers engaged in business at “specialty markets or other events” like flea markets, fairs, festivals, etc., to register, collect, and remit sales tax. 

How to Collect Sales Tax in North Carolina

North Carolina is a “destination-based” sales tax sourcing state. 

This means when you make a taxable sale to a customer in North Carolina, you should charge the combined sales tax rate at the buyer’s ship-to address. 

Should You Collect Sales Tax on Shipping Charges in North Carolina?

Yes. Shipping charges are subject to sales tax in North Carolina. 

Find out more about sales tax on shipping in every US state.

How to File and Pay Sales Tax in North Carolina

There are multiple ways to file and pay sales tax in North Carolina:

• File and pay online: You can file and pay North Carolina sales tax online via their Online Filing and Payments system. Taxpayers who owe more than $20,000 per month should file and pay online.
• File and pay by mail: You can fill out form E-500 and mail it in. You will receive a sales tax return booklet when you register for a North Carolina sales tax permit.
• Telefile: You can telefile by calling 1-877-252-3052
• Let Zamp handle your North Carolina sales tax filing and remittance so you never have to look at a sales tax return again! 

Explore how you can file and pay sales tax in other US states.

FAQs on Paying and Filing North Carolina Sales Tax

What Is Use Tax?

Use tax is paid to the North Carolina Department of Revenue by the purchaser when retailers don’t collect any sales tax on taxable goods and services. 

It applies to purchases, leases, and rentals of tangible personal property and certain digital property purchased or rented within or outside the State. The sales tax and use tax rate are the same.

I Didn’t Collect any North Carolina Sales Tax During this Period. Do I still Need to File a Return?

Yes. You should still file a “zero” return with the state even if you didn’t collect any sales tax over the taxable period. 

What Is the Penalty for Filing and/or Paying North Carolina Sales Tax Late?

The penalty for failure to file North Carolina sales tax is 5% of the tax due if filed within one month. If filed later than one month, you’ll have to pay an additional 5% per month or $5 — with a maximum penalty of 25%.

The penalty for failure to pay North Carolina sales tax is 10% of the tax due with a $5 minimum.

Can I Get an Extension on Filing My North Carolina Sales Tax Return? 

If you are unable to file or pay on time, contact the North Carolina Department of Revenue about a sales tax filing extension.

Can I Amend a North Carolina Sales Tax Return? 

Yes. 

You can amend your tax return using a copy of the original or a form from the back of your tax booklet. Just mark the form as "AMENDED" and send it to the tax department with additional tax, penalties, and interest if you owe any.

How Often Do I Need to File and Pay Sales Tax in North Carolina?

The frequency of sales tax filings in North Carolina depends on your sales tax liability:

North Carolina Sales Tax Due Dates

If a North Carolina sales tax due date falls on a Saturday, Sunday, or legal holiday, then the return is due the following business day. 

North Carolina quarterly sales tax filing due dates:

Let The Experts Handle Your North Carolina Sales Taxes

Are you a business owner struggling with sales tax responsibilities?

Not when you have Zamp.

We offer a top-notch solution that ensures accurate tax calculations and easy one-click registrations and filings, simplifying your sales tax process. 

Ready for streamlined sales tax management? Get started now!