NC North Carolina State sales tax rates
STATEWIDE SALES TAX RATE
ECONOMIC SALES THRESHOLD
Do you need to collect sales tax in North Carolina?
You’ll need to collect sales tax in North Carolina if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in North Carolina?
North Carolina considers a seller to have physical nexus if you have any of the following in the state:
- An office or place of business
- Employees, independent contractors, agents, or other representatives
- “Any place of distribution, sales or sample room, warehouse or storage place, or other place of business” that you maintain, use or occupy either directly or indirectly, temporarily or permanently
Do you have economic nexus in North Carolina?
Effective November 1, 2018, North Carolina considers vendors who make more than $100,000 in sales annually in the state or more than 200 transactions in the state in the previous or current calendar year to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state.
Is what you’re selling taxable?
Services in North Carolina are generally not taxable, with important exceptions. If the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products. Some counties also consider a limited number of services (such as laundry and dry cleaning) taxable. Further, on March 1, 2016, some repair, maintenance and installation services became taxable.
Tangible products are taxable in North Carolina, with a few exceptions. These exceptions include certain groceries, prescription medicine and medical devices, and machinery and chemicals used in research and development.
Is SaaS taxable in North Carolina?
SaaS is non-taxable in North Carolina.
What is use tax?
In North Carolina, you must pay use tax if you purchased, leased or rented items inside or outside the state for storage, use, or consumption in the state and did not pay the applicable sales and use tax at the time of purchase.
Collecting Sales Tax
North Carolina is a destination-based sales tax state. So if you live in North Carolina, you collect sales tax at the rate of your buyer’s location.
No matter if you are based in North Carolina or not based there but have sales tax nexus there, charge sales tax at the rate of your buyer’s ship to location.
The North Carolina state sales tax rate (and use tax rate) is 4.75%.
Should you collect sales tax on shipping charges in North Carolina?
North Carolina considers shipping charges to be taxable.
When are Returns Due?
When you file and pay North Carolina sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in North Carolina?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In North Carolina, you will generally be required to file and remit sales tax either monthly or quarterly.
North Carolina sales tax returns are generally due the 20th or the final day of the month following the reporting period. If the North Carolina filing due date falls on a weekend or holiday, sales tax is due the next business day.
Important to note: Some very high-volume North Carolina filers may be assigned to make monthly prepayments.