Most tangible personal property is subject to sales tax. However, some necessities like food, clothing and medication are not taxable in some states. And sometimes states consider things like digital goods (eBooks, music, movies) and software-as-a-service (SaaS) taxable even though they can’t be touched or held.
Here’s how North Carolina taxes the most commonly sales tax exempt items:
Do I need a North Carolina sales tax permit if I only sell temporarily in the state?
Yes. North Carolina requires that retailers engaged in business at “specialty markets or other events” like flea markets, fairs, festivals, etc. 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 that 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.
When your sales tax filing due date approaches, you can file North Carolina sales tax returns in multiple ways.
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 are required to 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
I didn’t collect any North Carolina sales tax 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 tax due if filed within one month. If filed later than one month late, there is an additional 5% penalty per month or $5, with a maximum of 25% in all.
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?