The sales tax rate in Asheville, NC is 7%. That combines North Carolina’s 4.75% state rate with Buncombe County’s 2.25% local rate, and it applies uniformly across the city because there is no separate municipal sales tax.1North Carolina Department of Revenue. Current Sales and Use Tax Rates Groceries, prescriptions, vehicles, and hotel stays each follow their own rules, so the number on your receipt won’t always be 7%.
What the 7% Applies To
Most retail purchases in Asheville are taxed at the full 7%: clothing, electronics, household goods, restaurant meals, and almost anything else you buy off a shelf or a menu.2North Carolina General Assembly. North Carolina General Statutes 105-164.4 – Tax Imposed on Retailers and Certain Facilitators Buncombe County does not levy a transit tax, which is why the rate stays at 7% rather than the 7.25% or 7.5% charged in some other North Carolina counties.
One category catches people off guard: labor. North Carolina taxes repair, maintenance, and installation services performed by retailers at the same rate as goods, so you’ll see 7% added when a tire shop, electronics store, or appliance dealer charges you for the work and not just the parts.2North Carolina General Assembly. North Carolina General Statutes 105-164.4 – Tax Imposed on Retailers and Certain Facilitators Contractors doing real-property work on your home fall under a different set of rules.
Groceries Are Taxed at 2%
Qualifying food for home consumption is exempt from the 4.75% state portion, so only the 2% local tax applies. A $100 grocery run in Asheville adds $2 in tax instead of $7.3North Carolina Department of Revenue. Food, Non-Qualifying Food, and Prepaid Meal Plans
Not everything in a grocery store qualifies. These items still get the full 7%:
- Prepared food, including restaurant meals, deli items sold with utensils, and anything heated for immediate eating
- Soft drinks and candy
- Dietary supplements
- Food sold through vending machines
Small artisan bakeries get a narrow carve-out. If a bakery takes in under $1.8 million annually and more than 80% of its revenue comes from baked goods, items sold without eating utensils stay at the 2% rate.4North Carolina General Assembly. North Carolina General Statutes 105-164.13B – Food Exempt From Tax Everyone else selling ready-to-eat food collects 7%.
Prescriptions and Medical Items
Prescription medications are fully exempt from North Carolina sales tax, with no state or local tax applied at the pharmacy counter. The exemption covers drugs that federal law requires to be dispensed on prescription, over-the-counter drugs sold on prescription, and insulin. Prosthetic devices, mobility equipment sold on prescription, durable medical equipment, and durable medical supplies prescribed by a provider are also exempt.5North Carolina General Assembly. North Carolina General Statutes 105-164.13 – Retail Sales and Use Tax
Over-the-counter medications bought without a prescription are taxed at the standard 7%. The same goes for general health and beauty products.
Vehicles Are Taxed at 3% Instead
Buying a car in Asheville does not trigger the 7% sales tax. North Carolina charges a 3% highway-use tax on vehicle purchases, collected whenever a title is transferred.6North Carolina Division of Motor Vehicles. Vehicle Taxes The tax applies to the vehicle’s retail value, or market value in a private-party sale, minus any trade-in allowance.7North Carolina General Assembly. North Carolina General Statutes 105-187.3 – Rate of Tax
Two caps exist. Commercial motor vehicles and RVs top out at $2,000. Vehicles bought outside North Carolina and owned for more than 90 days before being registered in the state are capped at $250.6North Carolina Division of Motor Vehicles. Vehicle Taxes A typical passenger car bought at an Asheville dealership has no cap: the 3% applies to the full price after your trade-in credit.
Lodging Carries an Extra 6%
Short-term stays in Buncombe County trigger a 6% occupancy tax on top of the 7% sales tax, pushing the effective rate on a hotel room to 13% before any resort or booking fees.8Buncombe County, NC. Occupancy Tax It applies the same way to hotels, bed-and-breakfasts, Airbnb listings, and VRBO rentals.
The taxable base is broad. It covers the nightly room rate plus cleaning fees, pet fees, extra-person charges, damage fees, and early or late departure fees. Stays of 90 consecutive days or more at the same accommodation are exempt, and if a guest crosses that threshold, the establishment must refund any occupancy tax already collected. Federal employees paying with a Centrally Billed Account travel card and nonprofits renting rooms for charitable purposes are also exempt.8Buncombe County, NC. Occupancy Tax
Out-of-State Purchases
If you buy something from an out-of-state seller that doesn’t collect North Carolina tax, you owe consumer use tax at the same 7% combined rate. Most residents report it on their annual North Carolina individual income tax return (Form D-400) rather than filing separately.9North Carolina Department of Revenue. Consumer Use Tax Grocery items that would qualify for the 2% rate, along with boats and aircraft, are reported separately on Form E-554.
Most large online retailers now collect North Carolina tax at checkout, so this obligation usually comes up with smaller out-of-state vendors, private-party purchases across state lines, or things you buy while traveling.