The NC sales tax is 4.75% at the state level, plus a county rate that brings the combined total to between 6.75% and 7.5% depending on where you make the purchase. It applies to most physical goods, a growing list of digital products, and several services people don’t always expect, including repairs and installation work. Groceries, prescription drugs, and professional services are treated separately.
What You Pay by County
The 4.75% state rate is the same in all 100 counties.1North Carolina General Assembly. GS 105-164.4 – Tax Imposed on Retailers and Certain Facilitators On top of it, every county charges a local tax, usually 2% to 2.75%. Most counties land at a combined rate of 6.75% or 7%. Counties that have passed a 0.50% transit tax for public transportation sit higher, and Durham County currently has the highest combined rate at 7.5%. Starting July 1, 2026, Mecklenburg County will add an extra 1% local tax, pushing Charlotte-area purchases above the current statewide ceiling.2North Carolina Department of Revenue. Current Sales and Use Tax Rates
North Carolina uses destination-based sourcing. The rate is set by where the buyer receives the goods, not where the seller is located. If a store in a 6.75% county ships an item to a customer in a 7.5% county, the 7.5% rate applies. For an in-person purchase, the rate is simply the county you’re standing in.
What’s Taxed
Sales tax applies to most tangible personal property sold at retail. That covers everyday categories like clothing, electronics, furniture, appliances, and sporting goods. The statute also pulls water, electricity, gas, steam, and prewritten computer software into the definition of tangible personal property.3North Carolina Department of Revenue. Taxable Items
Digital products are taxable too. Streamed or downloaded music, movies, and TV shows, digital books, electronically delivered newspapers and magazines, digital photographs, and even digital greeting cards all fall within the tax, charged at the full combined state, local, and transit rate.4North Carolina Department of Revenue. Certain Digital Property
Services are taxed more narrowly than goods, but the categories that do apply reach further than many people realize. Repair, maintenance, and installation services for both personal property and real property are fully taxable at the combined rate. Getting a phone screen replaced, having a plumber fix a leak, or hiring a contractor to install a new roof all trigger the tax, and any materials used as part of the job are included in the taxable price.1North Carolina General Assembly. GS 105-164.4 – Tax Imposed on Retailers and Certain Facilitators Telecommunications service, satellite digital audio radio, admission charges to entertainment events, and dry cleaning and laundry services are also taxable. Prepaid telephone calling service is taxed at the point of sale rather than the point of use.
What’s Taxed Differently
A few big-ticket categories don’t follow the general rules.
Motor vehicles aren’t subject to regular sales tax at all. Instead, the state charges a 3% highway-use tax each time a vehicle title is transferred, whether the car, truck, or motorcycle is new or used.5NCDOT. Vehicle Taxes That tax is collected through the DMV rather than at the dealership counter in the usual sense.
Manufactured homes and modular homes get a reduced base. The 4.75% state rate applies to only 50% of the sales price, and no local or transit taxes are added. A $100,000 manufactured home is taxed on $50,000, producing a tax bill of $2,375.6North Carolina Department of Revenue. Manufactured and Modular Homes
Groceries have their own split rate, covered in the next section.
What’s Exempt
Qualifying food is the exemption that touches the most households. Groceries are exempt from the 4.75% state rate and from transit taxes, but they still carry a flat 2% local tax. The definition of “qualifying food” is narrower than it sounds. It excludes candy, soft drinks, dietary supplements, prepared food, food sold through vending machines, and prepaid meal plans. Prepared food means items sold heated, items the retailer combined from two or more ingredients, or items sold with eating utensils.7North Carolina Department of Revenue. Food, Non-Qualifying Food, and Prepaid Meal Plans A bag of raw chicken at the grocery store is taxed at 2%. The rotisserie chicken from the same store is taxed at the full combined rate.
Prescription drugs and certain medical devices sold on prescription are exempt from both state and local sales taxes. Professional services, including legal advice, medical consultations, accounting, and real estate brokerage, aren’t subject to sales tax at all. Agricultural products sold directly by the producer and machinery used in manufacturing may also qualify for exemption, though those typically require documentation.
When You Owe Use Tax
If you buy something from outside North Carolina for use in the state and the seller doesn’t charge North Carolina sales tax, you owe use tax on that purchase. The rate matches what the combined state and local rate would have been if you had bought it in your county.2North Carolina Department of Revenue. Current Sales and Use Tax Rates
This used to come up constantly with online shopping. Now that most large retailers and marketplaces collect North Carolina tax at checkout, the main situations left are buying from a small out-of-state vendor that doesn’t collect, or carrying purchases back from another state. Individuals can report what they owe on their state income tax return rather than filing a separate form.
If You’re a Business Collecting the Tax
Any business selling taxable goods or services in North Carolina needs a certificate of registration before it starts collecting. Registration is free through the NCDOR website or by mail, and no bond or deposit is required for most businesses.8North Carolina Department of Revenue. Sales and Use Tax Registration The NCDOR assigns a filing frequency, quarterly, monthly, or monthly with prepayment, based on how much tax you collect.9North Carolina Department of Revenue. Filing Frequency and Due Dates
Out-of-state sellers that exceed $100,000 in gross sales sourced to North Carolina during the current or previous calendar year must register and collect, regardless of whether they have any physical presence in the state. Marketplace facilitators like Amazon, Etsy, and eBay are treated as the retailer for sales they enable and collect the tax themselves.10North Carolina General Assembly. GS 105-164.4J – Marketplace-Facilitated Sales
Missing a filing deadline carries a 5% penalty on the net tax due for each month or partial month the return is late, up to 25%. Paying late adds a separate 5% penalty plus interest from the original due date.11North Carolina Department of Revenue. Penalties and Fees Overview Those penalties stack, so a return that’s both late and unpaid takes both hits. Filing on time with a partial payment beats waiting until you can pay in full.
Businesses buying inventory for resale, or making other exempt purchases, give the seller Form E-595E, the Streamlined Sales and Use Tax Certificate of Exemption, so the seller doesn’t charge tax at the register. The form requires a valid sales and use tax registration number or exemption number.12North Carolina Department of Revenue. Form E-595E – Streamlined Sales and Use Tax Certificate of Exemption Sellers should verify every certificate before honoring it, because an invalid certificate leaves the seller owing the uncollected tax if the NCDOR audits the sale. Keep them on file at least through the statute of limitations.