North Carolina Sales Tax
North Carolina Sales Tax At a Glance
State rate: 4.75%
Maximum combined rate: 7.5%
Sourcing: Destination
Tax Holidays: None
Streamlined Sales Tax Member: Yes
Governing Body: North Carolina Department of Revenue
North Carolina state-wide sales tax affects many purchases within the borders of the state as well as additional local taxes that apply in certain cities and counties within the state.
In this guide we will review the items on which sales taxes apply in North Carolina, how nexus is established for those who do business in the state, and the process for acquiring a permit to collect sales tax and subsequently collecting that sales tax each reporting period.
North Carolina Sales Tax Rates
The following rates apply at the state and city level:
- The State of North Carolina charges a sales tax rate of 4.75%
- Counties and municipalities in North Carolina charge additional sales tax with rates between 2% and 2.75% for a maximum rate of 7.5%.
Because each North Carolina county and city charges a slightly different sales tax rate in North Carolina, it is recommended you use a sales tax calculator to determine the rate that will apply for your municipality.
Tax Sourcing
North Carolina is a Destination-Based Sourcing state.
General Rule: Sales are sourced to the location where the customer receives the product or service.
North Carolina Nexus
If you operate your small business solely in North Carolina and what you sell is subject to sales tax, you must collect tax on each applicable purchase. However, if you live outside the state and do business in North Carolina, you’ll need to establish sales tax nexus first to determine if you must collect and remit sales tax payments to the Department of Revenue for North Carolina.
Physical Nexus
The following situations constitute physical nexus in North Carolina:
- If you have an office or other place of business in the state
- If you have any agent of your business in the state, including employees, independent contractors, or representatives.
- If you operate or occupy a warehouse, storage place, salesroom, or distribution hub within the state where your goods are stored.
To learn more about establishing sales tax nexus and determining if you’ll need to collect sales tax in the state, you can visit the North Carolina Department of Revenue website here.
Economic Nexus
Previously, economic nexus was established in North Carolina if a remote seller made 200 or more transactions or $100,000 or more in gross sales to North Carolina residents in a calendar year.
However, the 200 transaction threshold was repealed in 2026, so the only measure is $100,000 or more in gross sales.
Marketplace Facilitators
Facilitators (Amazon, Etsy, etc.) must collect and remit tax if they exceed the $100,000 threshold (combined direct and third-party sales).
- Sellers: If you sell only through a marketplace, you generally do not need to register. However, if you hit the threshold via your own website, you must register and collect on those direct sales.
What Is Taxable in North Carolina
If you’ve established that you must collect sales tax in North Carolina, the next step is determining which items or services you sell are taxable in the state. All tangible personal property is subject to sales tax, and like many states, the bulk of services in North Carolina are not taxable. Here are some things to keep in mind when determining if you should collect tax:
Tangible Goods
Most physical items are taxable at the combined rate.
- Groceries: Unprepared food is exempt from state tax but remains subject to a 2.0% local tax in most counties.
- Prescriptions are exempt.
Services
Most services are exempt. However, North Carolina taxes “Repair, Maintenance, and Installation” (RMI) services. If you fix, install, or maintain tangible personal property (like a car or an HVAC system), the labor is generally taxable.
Shipping and Handling
Delivery and shipping charges are taxable if the item being sold is taxable. This applies even if the charges are separately stated on the invoice.
Digital Goods and Services
Digital Products: E-books, digital music, and streamed movies are taxable.
SaaS: Software as a Service is taxable in North Carolina as “prewritten computer software” delivered electronically.
It is recommended that you fully review the Department of Revenue’s G.S. § 105-164.13 to determine what exemptions apply to you if you do business in North Carolina.
Sales Tax Holidays
North Carolina repealed its annual sales tax holidays in 2014. As of early 2026, the state does not hold a Back-to-School or Energy Star tax holiday. Be wary of older guides online that still list these; they have not been active for over a decade.
Registration and Filing
Once you have established that you have sales tax nexus in North Carolina, you must register with the state to acquire a sales tax permit for collection. The state offers two ways to register for the collection of sales tax, including:
- Register for your permit online on the Department of Revenue’s website.
- Download form NC-BR and mail it to the Department of Revenue.
You’ll need all of your business information, including your Federal Employer Identification Number and, if you are located in the state, your North Carolina Secretary of State Number. The state offers a checklist for business registration, including the information you will need. This list also applies to sales tax permit registration.
- For Those in State – North Carolina is a destination-based sales tax collection state. This means that you will collect based on where the buyer is located. Because there are variable rates in all of North Carolina’s counties and some cities, you will need a tax calculator to determine the rate you’ll be charging for each purchase.
- Out of State Sellers – For out-of-state sellers, the same destination charges apply if you have nexus and are selling to a buyer in the state. This means you will need to track and collect sales tax on those transactions within the state.
- Shipping Charges – Shipping charges are taxable within North Carolina and should be included when calculating total sales tax due at the time of a transaction.
- Filing Your Tax Returns – The North Carolina Department of Revenue has an online portal through which you can pay your sales tax due here. You can also use the form E-500 to pay via mail, or find instructions for using EDI (Electronic Data Interchange) here.
Filing Frequencies
How frequently you file will be determined by the amount of sales tax owed to the state. When you receive your permit, North Carolina will assign you a filing frequency, with the due dates listed below.
Deadlines
Quarterly: If sales tax liability is consistently less than $100 per month, filers can submit their tax returns every quarter on the following due dates:
| Period | Due Date |
|---|---|
| January – March (Q1) | April 30 |
| April – June (Q2) | July 31 |
| July – September (Q3) | October 31 |
| October – December (Q4) | January 31 |
Monthly: For those with tax liability between $100 and $20,000 per month, filing is expected every month on the following dates:
| Period | Due Date |
|---|---|
| January | February 20 |
| February | March 20 |
| March | April 20 |
| April | May 20 |
| May | June 20 |
| June | July 20 |
| July | August 20 |
| August | September 20 |
| September | October 20 |
| October | November 20 |
| November | December 20 |
| December | January 20 |
Monthly with Prepayment: North Carolina does not offer an annual payment option. They do, however, require monthly prepayment if the tax liability is greater than $20,000 per month consistently. The prepayment must be at least 65% of the tax due for the current month or the same month from the previous year. For those that this applies to, returns must be filed and paid online. This does not apply to those who file the E-500E for utility and liquor sales tax or the E-500J for machinery and equipment sales taxes.
Penalties and Interest
- Failure to File: 5% of the tax due per month (up to 25% max).
- Failure to Pay: 5% of the tax due.
- Interest (2026): For the period of January 1, 2026, through June 30, 2026, the annual interest rate is 7.0%. This rate is reviewed every six months.
Resources
North Carolina Sales Tax Software
For those who are required to file and remit sales tax in the State of North Carolina, there are a number of factors to keep in mind. TaxTools sales tax software can help manage the destination-based sales tax collection and remittance required by the state with data review and sorting features and ensure tax compliance each step of the way. It can work in conjunction with your current website and eCommerce setup or can be integrated into your transaction setup. If you would like to learn more, contact us today or signup here for a free trial of the TaxTools software.
Last updated February 2026