North Carolina’s general state sales tax rate is 4.75 percent. Certain items have a 7-percent combined general rate and some items have a “miscellaneous” rate. North Carolina also charges disposal taxes on certain items, and it has discretionary taxes at local levels.
Certain industries, including logging and milling, have tax exemptions. Nonprofits selling items do not have to collect sales taxes in most cases.
This guide does not fully describe all of North Carolina’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the North Carolina Department of Revenue website to learn more about the rules, regulations, tax laws, and tax information associated with their industries and the types of taxes due.
Types of taxes for sales of goods
North Carolina has several taxes across various industries, including the general sales and use tax rate and local sales taxes.
Sales and use tax
The general sales tax rate is 4.75 percent. Businesses must add their local sales tax rate to the state’s rate. North Carolina also has a use tax rate, which is the same as the sales tax rate. A business that purchases taxable tangible personal property and uses or stores it instead of reselling it must pay the use tax on the items.
Admission charges
North Carolina charges state and local sales tax on admissions. Admissions are also subject to transient rates.
Lodging (Hotel room occupancy tax)
Lodging is subject to general state and local sales and transient taxes in addition to taxes imposed by any special jurisdiction, city or county. Gross receipts include facilitation fees and other charges the establishment might charge.
Motor vehicle rentals
Vehicle rentals are subject to a separate tax, depending on the type of rental:
- Short-term rentals: 8 percent
- Vehicle subscriptions, short-term: 5 percent
- Long-term lease or rental: 3 percent
Manufactured and modular homes
North Carolina charges sales tax on 50 percent of the cost of a modular or manufactured home, including skirting, gutters, siding, upgrades and other accessories attached when delivered. However, it is only subject to the 4.75-percent general tax at the state level.
Food and beverage tax
A local rate of 2 percent sales or use tax is applied to qualifying food for use, storage or consumption. This food is not subject to local and transient rates. Qualifying food includes food and food ingredients not consumed on the premises, with the exception of some non-qualifying items.
Non-qualifying food, including food sold in a vending machine, dietary supplements, certain bakery items, prepared food, candy and soft drinks, is subject to the state, local and transient sales and use tax rates.
Prepaid meal plans are also subject to state, local and transient sales and use tax rates.
Boats
Boats are not taxed at the state and local sales tax rate. Businesses that sell boats must collect a 3-percent state sales tax rate. Each article sold has a minimum tax of $1,500. The tax applies to boats:
- Purchased in North Carolina.
- Purchased elsewhere and received in North Carolina.
If a business does not charge a consumer the 3-percent sales tax, the purchaser must pay the tax in the form of a use tax. A consumer may pay use taxes by downloading the sales and use tax form from the South Carolina Department of Revenue.
Combined general rate
Several items are subject to the combined general rate of 7 percent, including:
- Aviation gasoline and jet fuel
- Electricity
- Piped natural gas
- Spirituous liquor
- Telecommunications and ancillary service
- Video programming service
Discretionary taxes (Local tax rates)
North Carolina cities and counties have additional sales and use tax rates that a business must add to the state sales tax rate. Some jurisdictions also have a transient tax. North Carolina publishes worksheets that show the county, city and transient taxes.
Registering for and filing North Carolina's taxes
You can register to file sales tax returns and remit payments at the North Carolina Department of Revenue. There is no fee to obtain a resale tax number (certificate of registration). Businesses can file by completing Form E-500 (or the appropriate form for the entity or industry, as applicable) or online.
Due dates for North Carolina’s sales taxes
If a business’s tax liability is less than $20,000 per month, but at least $100 per month, the business must file monthly. The tax due date for monthly filers is on or before the 20th day of the month following the previous month. For example, taxes collected in January are due on or before February 20.
If a business consistently has less than $100 per month, the business taxpayer can file sales and use tax returns quarterly. The returns and payment are due on or before the last day of the month following the end of the quarter (January, April, July, and October).
Businesses that file Forms E-500 or E-500E and have a tax liability of at least $20,000 per month must prepay the next month’s estimated taxes on or before the 20th day of each month. Filers who are required to make prepayments and use Form E-500 must pay online – they cannot file a paper form and remit payment by mail. Those who file Form E-500E should file paper returns and submit payment by ACH Debit, ACH Credit via electronic funds transfer via the e-Business Center.
The prepayment must be:
- The total amount of tax due;
- The amount of tax due for the same month in the preceding year; or
- The average monthly tax liability for the previous calendar year.
North Carolina sales tax holiday
North Carolina does not have a sales tax holiday.
North Carolina sales tax exemptions
In addition to sales by a nonprofit for certain purposes, North Carolina exempts certain sales to various industries, including loggers, millworks, and other industries.
Remote and marketplace sellers
Remote sellers that have more than $100,000 in sales of tangible personal property into North Carolina or 200 or more separate transactions into North Carolina during the previous or current calendar year must register with the North Carolina Department of Revenue to collect and pay sales taxes.
Marketplace sellers must also register if their marketplace facilitators do not collect North Carolina’s sales tax and the sellers meet the above-mentioned thresholds.
FAQs
The state’s general sales tax rate is 4.75 percent. Counties and cities also have additional sales and use tax rates that businesses must collect.
Download and complete the resale certificate Form E-595E. When making purchases that are tax-exempt for resale, be sure to provide the vendor with a signed and completed copy of the form.
It depends on whether the state follows the threshold rules or requires all vendors to collect taxes. Each state’s Department of Revenue or Department of Taxation page will have more information for remote sellers and marketplace sellers. However, as a convenience to buyers, most businesses collect sales tax regardless of whether they meet the thresholds.
If a business registers online, it will instantly receive access to its account and tax number. In some circumstances, a business might receive a tax number within 10 business days. If a business decides to file by mail, it could take up to four weeks to receive the number.
Businesses who choose to file by mail instead of online are encouraged to file online. However, if a business wishes to file by mail, it can send reports to the North Carolina Department of Revenue, PO Box 25000, Raleigh, NC 27640-0700.
If a business does not have any retail sales, it does not have to file a return. However, the business must obtain a Certificate of Registration. The wholesaler must also keep exemption certificates given by the retailers to prove its sales were tax-exempt wholesale sales not subject to taxes.
No. However, the business must indicate the active months when it registers for a tax account.
Yes. If a business does not file returns or files returns that show no sales for 18 months, the certificate of registration becomes void. The North Carolina Department of Revenue reviews tax accounts annually and removes accounts that have been inactive or that have not had sales for 18 months.
If a business does not file on time, the North Carolina Department of Revenue charges a 5 percent failure to file penalty plus a failure to pay a penalty of 10 percent. The Department of Revenue also charges interest on the past due amount.
