The sales tax rate in Union County, North Carolina is 6.75%. That’s the 4.75% North Carolina state rate plus a 2% local rate, and it applies to most retail purchases made in the county.1North Carolina General Assembly. North Carolina General Statutes 105-164.4 – Tax Imposed on Retailers and Certain Facilitators2Avalara. Union County Sales Tax Rate Some categories carry a reduced rate, a dollar cap, or no tax at all, and knowing which is which can save real money on bigger purchases.
What the Full 6.75% Covers
Most of what you buy at a store in Union County is taxed at the combined rate. Tangible personal property is the broadest category: clothing, electronics, furniture, appliances, building materials, prewritten software, and the rest of what lines store shelves.3North Carolina Department of Revenue. Taxable Items
Digital purchases are taxed the same way even though nothing physical changes hands. That includes digital audio and audiovisual works, e-books, electronic newspapers and magazines, photographs, and greeting cards delivered electronically, whether you buy them outright or pay for ongoing access through a subscription.4North Carolina Department of Revenue. Certain Digital Property
Labor is often taxable too. Repair, maintenance, and installation services on tangible personal property, real property, motor vehicles, and digital property all carry the full combined rate.5North Carolina Department of Revenue. Repair, Maintenance, and Installation Services; and Other Repair Information Pay someone to fix an appliance or install a ceiling fan outside of a larger construction project, and you’ll see sales tax on the invoice. Work that qualifies as a capital improvement to real property, such as new construction, remodeling, roof replacement, or HVAC installation, is treated differently: the contractor pays tax on the materials, and the customer doesn’t see sales tax on the job.6North Carolina Department of Revenue. Real Property Contracts
Admission charges are also taxable. Movie tickets, concerts, live performances, sporting events, museum admissions, and similar attractions all count, and so do the convenience fees, processing fees, and facility surcharges bundled into the price. Season tickets are taxed when you pay for them, not when you attend.7North Carolina Department of Revenue. Admission Charges
Reduced Rates and Dollar Caps
Groceries at 2%
Unprepared food bought for home consumption skips the 4.75% state rate but still carries the 2% local rate. So a grocery run in Union County is taxed at 2%, not 6.75%. Restaurant meals, prepared food, and food sold through vending machines don’t qualify and are taxed at the full rate.8North Carolina Department of Revenue. Food, Non-Qualifying Food, and Prepaid Meal Plans
Motor Vehicles
North Carolina does not apply regular sales tax to vehicle purchases. A 3% highway-use tax is collected by the DMV each time a title transfers.9North Carolina Department of Transportation. Vehicle Taxes Vehicles brought in from out of state and titled after more than 90 days of ownership are taxed on the vehicle’s value, with a maximum of $250.
Manufactured and Modular Homes
The 4.75% state rate applies to only half the sales price of a manufactured or modular home, and no local or transit tax is added. The effective state tax works out to about 2.375% of the full purchase price.10North Carolina Department of Revenue. Manufactured and Modular Homes
Boats, Aircraft, and Jet Engines
Boats are taxed at the 4.75% state rate with no local tax, and the total is capped at $1,500 per boat.11North Carolina Department of Revenue. Instructions for Form E-555, Boat and Aircraft Use Tax Return Aircraft follow the same pattern with a $2,500 cap.12North Carolina Department of Revenue. Aircraft and Qualified Jet Engines Qualified jet engines have their own $2,500 cap. On a $500,000 boat the cap means $1,500 in tax instead of the roughly $23,750 the full combined rate would produce.
What’s Fully Exempt
Prescription drugs, including their packaging and informational inserts, are exempt from sales tax. Over-the-counter drugs sold on a prescription and insulin also qualify. Prosthetic devices, durable medical equipment sold on prescription, durable medical supplies sold on prescription, and mobility-enhancing equipment sold on prescription are all exempt as well.13North Carolina General Assembly. North Carolina General Statutes 105-164.13 – Retail Sales and Use Tax Exemptions and Exclusions
Businesses buying inventory for resale don’t pay tax on those purchases, which keeps the same item from being taxed twice before a consumer gets it. To claim the exemption, the buyer gives the seller a completed Form E-595E (Streamlined Sales and Use Tax Certificate of Exemption) with either a sales and use tax registration number or an exemption number.14North Carolina Department of Revenue. Form E-595E, Streamlined Sales and Use Tax Certificate of Exemption Keep those certificates on file; if the Department of Revenue requests them during an audit and you can’t produce one, you can end up owing the tax yourself.
Out-of-State and Online Purchases: Use Tax
If you buy something from an out-of-state seller who doesn’t collect North Carolina tax, or who collects less than the full 6.75%, you owe use tax to cover the difference. The use tax rate matches the sales tax rate, so Union County residents owe 6.75% on most items. This comes up most often with online orders from smaller retailers, purchases made while traveling, and business equipment ordered from out-of-state vendors.15North Carolina Department of Revenue. Consumer Use Tax
Where you report it depends on who you are and what you bought. Individuals report use tax on their North Carolina income tax return (Form D-400) for most non-business purchases. Boats and aircraft go on Form E-555 instead. Food taxed at the reduced 2% rate uses Form E-554. Businesses already registered for sales tax report use tax on their regular Form E-500. Businesses not yet registered need to register online before they can file.15North Carolina Department of Revenue. Consumer Use Tax
If You’re a Business Selling in Union County
Registering
Any business selling taxable goods or services in Union County needs a North Carolina sales and use tax account before its first sale. Register online through the Department of Revenue’s portal or submit the paper Form NC-BR.16North Carolina Department of Revenue. Business Registration You’ll need your Social Security Number or Federal Employer Identification Number, business name, address, phone number, and your North Carolina Secretary of State number if you have one. Once approved, you get a Sales and Use Tax Certificate authorizing you to collect, and the Department assigns an initial filing frequency based on your estimated tax liability.
Filing Frequency and Deadlines
The Department assigns your schedule based on how much tax you collect:
- Monthly filers: tax liability consistently between $100 and $20,000 per month. Returns and payment are due by the 20th of the following month.
- Monthly with prepayment: tax liability consistently at or above $20,000 per month. Same monthly deadline, plus a required prepayment toward the next month’s liability. Payments must be submitted online.
- Quarterly filers: tax liability consistently under $100 per month. Returns are due by the last day of January, April, July, and October for the prior quarter.
Returns are filed on Form E-500 through the Department’s online system, and payments can be made by ACH or credit card.17North Carolina Department of Revenue. Filing Frequency and Due Dates
Penalties for Missing a Deadline
Filing a return late triggers a penalty of 5% of the net tax due for each month or partial month the return is overdue, up to a maximum of 25%.18North Carolina Department of Revenue. Penalties and Fees Overview That cap hits after five months.
Paying late is a separate penalty on top of the late-filing penalty. Through mid-2027, the late payment penalty is a flat 5% of the tax not paid by the original due date. Starting July 1, 2027, the structure changes to 2% per month, capping at 10%. Interest also accrues on unpaid balances.18North Carolina Department of Revenue. Penalties and Fees Overview Setting calendar reminders ahead of your filing date and paying electronically the same day you file is the simplest way to stay clear of all of it.