As an e-commerce seller, you will need to collect sales tax in North Carolina if you have:
(1) gross sales in excess of $100,000 or 200 or more separate transactions in the previous or current calendar year (economic nexus), or
(2) physical presence in North Carolina (physical nexus).
Below, we will highlight some of the basic provisions of North Carolina sales tax law.
What is the tax rate range for North Carolina?
State: North Carolina’s general sales tax rate is 4.75%. North Carolina has a reduced rate for qualifying food of 2%. See Food, Non-Qualifying Food, and Prepaid Meal Plans
Local: North Carolina localities impose their own sales tax at rates ranging from 0% to 2.75%. See Tax Rates & Charts
Do you have physical or economic nexus in North Carolina?
Physical nexus. Certain business activities create physical nexus in North Carolina. If you have physical nexus, you are required to collect and remit sales tax on all sales that are shipped to North Carolina. Examples of business activities that can create physical nexus in North Carolina include:
- occupying, or using any office, place of distribution, sales or sample room, warehouse or storage place, or other place of business in this State
- permanently or temporarily, having any representative, agent, sales representative, marketplace facilitator subject to the requirements of G.S. 105-164.4J, or solicitor transacting business in this State.
- Maintaining in this State, either permanently or temporarily, directly or through a subsidiary, tangible personal property or certain digital property for the purpose of lease or rental.
Economic nexus. Remote sellers and marketplace facilitators that have gross sales in excess of $100,000 or 200 or more separate transactions in the previous or current calendar year must collect and remit North Carolina sales and use tax on taxable sales. Additional information:
- The sales price of all sales of tangible personal property, digital property, and services sourced to North Carolina are added together to determine whether the remote seller meets or exceeds the threshold, including taxable sales, sales for resale, exempt sales, nontaxable sales, and marketplace-facilitated sales
- If you exceed the threshold, you must register and begin collecting within 60 days
Remote Seller and Marketplace Facilitator FAQs and Marketplace Facilitators and Marketplace Sellers Frequently Asked Questions
What are examples of sales of taxable items?
- Tangible personal property, unless an exemption applies
- Certain services
- Qualifying food is taxed at a reduced 2% state rate (except candy, dietary supplements, prepared food, and soft drinks)
- Food is exempt from local sales tax
- Certain digital property
- Leases and rentals of tangible personal property
Overview of Sales and Use Taxes
What are examples of sales of nontaxable/exempt items?
- Prescription drugs
- Certain purchases for farming purposes
- Software as a service (SaaS)
Are there any sales tax holidays?
Currently, North Carolina does not have any sales tax holidays.
Is North Carolina a member of the SST (Streamlined Sales Tax)?
Currently, North Carolina is a full member of the Streamlined Sales Tax Governing Board (SSTGB).
How to get a sales tax permit / links to register in North Carolina?
You can register online at:
Streamlined Sales Tax Registration System