North Carolina Sales Tax Guide 2025: Compliance, Rates, Guidelines

This guide provides an in-depth overview of North Carolina’s sales tax laws, detailing rates, exemptions, and filing steps. Stay informed and manage your business’s tax responsibilities effectively.

North Carolina Sales Tax

Sales tax in North Carolina was introduced in 1933 to fund state services and is governed by North Carolina sales tax law. Administered by the North Carolina Department of Revenue, the tax applies to most goods and services, with businesses also required to comply with North Carolina sales and use tax regulations for taxable transactions.

North Carolina Sales Tax Rate

Jurisdiction	Sales tax rate
State tax	4.75%
Local tax	0.0%–2.75%
Combined Tax	4.75%–7.5%

Learn more and check out the city-based tax rates in North Carolina.

North Carolina Sales Tax Calculator

A North Carolina sales tax calculator helps retailers accurately compute the sales tax owed on taxable transactions by applying the combined state and local tax rates. The state sales tax rate is 4.75%, with additional local rates ranging from 2% to 2.75%, depending on the jurisdiction. Using a calculator simplifies compliance with North Carolina sales tax law by ensuring accurate and efficient tax calculations.

Example for Retailers: Imagine a retailer in Charlotte, North Carolina, selling a handbag priced at $200. The combined sales tax rate in Charlotte is 7.25% (state rate of 4.75% plus local rate of 2.5%).

Steps to Calculate Sales Tax:

1. Determine the Total Tax Rate:
   1. State rate: 4.75%
   2. Local rate: 2.5%
   3. Total tax rate: 7.25%
2. Calculate the Sales Tax Amount: Multiply the price of the item by the total tax rate: 2. $200 × 0.0725 = $14.50
3. Add the Sales Tax to the Item Price: Add the sales tax amount to the original item price to determine the total cost: 3. $200 + $14.50 = $214.50

Final Price: The customer pays $214.50 for the handbag, including $14.50 in sales tax.

Retailers can use a North Carolina sales tax calculator to automate this process and stay compliant with North Carolina sales and use tax regulations.

FAQs on Sales Tax

What is the sales tax rate in North Carolina?

The sales tax rate in North Carolina is 4.75% at the state level, with additional local rates ranging from 2% to 2.75%, resulting in a combined rate of 6.75% to 7.5%, depending on the location.

How to calculate sales tax in North Carolina?

To calculate sales tax in North Carolina, multiply the item's price by the combined state and local tax rate. For example, for an item priced at $100 with a 7% tax rate: $100 × 0.07 = $7 sales tax.

How to calculate sales tax for services in North Carolina?

For taxable services in North Carolina, multiply the service cost by the applicable combined state and local sales tax rate. For instance, if a taxable service costs $200 in a location with a 6.75% tax rate: $200 × 0.0675 = $13.50 sales tax.

Sales Tax Nexus in North Carolina

Type of Nexus	Threshold
Physical presence	Any physical presence
Economic nexus	$100,000 in sales
Marketplace nexus	$100,000 in sales

FAQs on Sales Tax Nexus

What is the sales tax nexus in North Carolina?

Sales tax nexus in North Carolina refers to the connection between a business and the state that requires the business to collect and remit sales tax. Nexus can be established through physical presence, such as having a store or warehouse in the state, or economic nexus, based on sales or transaction thresholds.

What is the sales tax nexus threshold in NC?

The sales tax nexus threshold in North Carolina is $100,000 in gross sales. Businesses exceeding this threshold must register, collect, and remit sales tax in North Carolina.

North Carolina Sales Tax Exemptions​

North Carolina offers sales tax exemptions on specific goods, services, and transactions to reduce tax liability for qualifying businesses and organizations. While most tangible personal property is taxable, exemptions apply to items like prescription medications, certain agricultural equipment, and sales for resale.

Some digital property, such as software used exclusively for business purposes, may also qualify for exemptions. Understanding these exemptions and the applicable tax rates is crucial for businesses to minimize their tax burden while maintaining compliance.

FAQs on Sales Tax Exemptions

What’s a North Carolina sales tax exemption certificate?

A North Carolina sales tax exemption certificate is a document that allows eligible businesses or entities to make tax-free purchases of qualifying goods or services. It must be issued to vendors at the time of purchase to claim the exemption.

What items or entities qualify for North Carolina sales and use tax exemption?

Qualifying items include prescription medications, certain agricultural equipment, and goods purchased for resale, while eligible entities include nonprofits, government agencies, and manufacturers. Learn more about North Carolina sales and use tax exemption.

Is SaaS taxable in North Carolina?

Yes, SaaS (Software as a Service) is taxable in North Carolina as it is considered digital property subject to sales tax.

Does North Carolina charge sales tax on clothes?

Yes, clothing is taxable in North Carolina and is subject to the combined state and local sales tax rates. So the next time you wonder, “Is clothing taxed in North Carolina?” remember it is. Check out North Carolina sales tax on clothing.

Does North Carolina have a tax exemption?

Yes, North Carolina offers tax exemptions for specific goods, services, and entities, such as nonprofits, manufacturers, and agricultural operations.

What is the NC state exemption number for sales tax?

The NC state exemption number is a unique identifier issued by the North Carolina Department of Revenue to entities approved for sales tax exemption.

Does North Carolina exempt sales tax for nonprofits?

Yes, nonprofits in North Carolina can qualify for sales tax exemptions on eligible purchases if they obtain an exemption certificate from the Department of Revenue.

How to apply for sales tax exemption in North Carolina?

To apply for sales tax exemption, submit the appropriate forms, such as Form E-595E for nonprofits, along with supporting documentation to the North Carolina Department of Revenue. Approval will grant an exemption certificate or exemption number. Check out the exemption forms.

What's the North Carolina Sales Tax Registration Process?

Registering for a sales tax permit in North Carolina is essential for businesses engaged in taxable sales. Below are the steps to complete the registration process in compliance with North Carolina’s tax policy.

1. Determine Your Obligation: Verify if your business is required to collect and remit sales tax based on physical or economic nexus. North Carolina requires businesses to register if they sell taxable goods or services and exceed $100,000 in sales annually.
2. Gather Business Information: Collect all necessary details, such as your Employer Identification Number (EIN), business name, address, contact information, and anticipated sales volume.
3. Visit the North Carolina Department of Revenue Website: Navigate to the North Carolina Department of Revenue's official website to access the Business Registration portal.
4. Complete the Registration Form: Fill out the online application, providing your business details and selecting the appropriate tax types you’ll be collecting, such as sales and use tax. Ensure all information is correct.
5. Submit the Application: After completing the application, submit it online through the portal. There is no fee to obtain a sales tax permit in North Carolina.
6. Receive Your Sales Tax Permit: Once the application is processed, you will receive your North Carolina sales tax permit, which authorizes you to collect and remit sales tax.
7. Understand Your Filing Requirements: Determine your filing frequency (monthly or quarterly) based on the volume of taxable sales as required by the state.
8. Stay Compliant: Regularly file accurate sales tax returns and remit payments by the due dates to avoid penalties and ensure compliance with North Carolina’s regulations.

North Carolina Sales Tax Filing

Filing sales tax in North Carolina is a required process for businesses holding a sales tax permit to report and remit collected taxes. Businesses must report taxable and exempt sales, calculate the total tax due, and submit their returns along with payment.

The filing frequency—monthly or quarterly—is determined by the business's total taxable sales and assigned by the North Carolina Department of Revenue during registration. Accurate reporting and adherence to deadlines are essential to comply with North Carolina’s tax code.

What are the North Carolina sales tax filing requirements?

Businesses must file sales tax returns by reporting taxable and exempt sales, calculating taxes owed based on the applicable rates, and remitting payment to the North Carolina Department of Revenue. Filing frequency (monthly or quarterly) depends on the business's taxable sales volume.

How do I file a sales tax refund in NC?

To file for a sales tax refund in North Carolina, submit the appropriate form along with supporting documentation, such as invoices and proof of overpayment, to the North Carolina Department of Revenue. Check out the different types of Claim for Refund Forms.

How often do you have to file sales tax in North Carolina?

The filing frequency for sales tax in North Carolina—monthly or quarterly—depends on the volume of taxable sales, as determined by the Department of Revenue during registration.

North Carolina Sales Tax Due Date​

Filing Frequency	Due Date
Monthly	Every 20th of the following month (Ex. Due date for January is February 28)
Quarterly	Last day of the month following the quarter’s end. (Ex. Due date for Q1 (January 1 – March 31) is April 30)

What date is NC sales tax due?

North Carolina sales tax is typically due on the 20th of the month following the end of the reporting period.

What is the penalty for filing NC sales tax late?

The penalty for late filing in North Carolina is 5% of the tax due per month, up to a maximum of 25%, plus interest on the unpaid amount.

North Carolina Sales Tax Revenue Service

For any concerns about North Carolina sales tax registration, filing or general inquiries, you can reach out to them through the following:

• Phone: 1-877-252-3052
• Website: https://www.ncdor.gov/
• Mailing Address: North Carolina Department of Revenue Post Office Box 25000 Raleigh, NC 27640-0640

That’s everything you need to know about North Carolina sales tax! Simplify compliance and reduce the stress with Kintsugi—sign up or book a demo and experience a difference.