North Carolina's statewide sales tax rate
North Carolina charges a 4.75% sales tax on most retail purchases. This is the base rate that applies statewide, set by state law. However, your total sales tax bill will often be higher because counties and cities can add their own local taxes on top of the state rate.
The 4.75% rate has been in place since 2011. It applies to tangible goods — physical items you can touch and take home — and to some services. Food, medicine, and certain other categories have different rules, which are covered in later sections.
Key Takeaways
- North Carolina's state sales tax is 4.75%, but your actual rate depends on which county and city you are in, because local taxes stack on top.
- Most counties add 2% to 2.75% in local sales tax, bringing typical total rates to 6.75% to 7.5%.
- Groceries, prescription medications, and medical equipment are exempt from sales tax in North Carolina.
- Services like haircuts, repairs, and labor are generally not taxed, but digital goods and some specific services are.
- You pay sales tax at the point of sale; the merchant collects it and sends it to the state and local tax authorities.
How local taxes change your total rate
Every county in North Carolina has the authority to add a local sales tax on top of the state 4.75%. Most counties charge between 2% and 2.75% locally. This means your total sales tax rate — what you actually pay at checkout — typically falls between 6.75% and 7.5%, depending on where you shop.
Some cities within counties can add an additional local tax as well, though this is less common. A few municipalities have adopted small additional taxes for specific purposes like transit or infrastructure. The best way to know your exact rate is to check with your county tax assessor's office or look at a recent receipt from a local retailer.
The following table shows approximate combined rates for major North Carolina counties. Rates can change, so verify with your local tax office before relying on these for planning:
| County | Local Rate | Combined Total |
|---|---|---|
| Mecklenburg (Charlotte) | 2.25% | 7% |
| Wake (Raleigh) | 2.75% | 7.5% |
| Guilford (Greensboro) | 2% | 6.75% |
| Durham | 2.75% | 7.5% |
| Forsyth (Winston-Salem) | 2% | 6.75% |
What is exempt from sales tax in North Carolina
Groceries and food are not taxed in North Carolina. This includes items from the grocery store like bread, milk, vegetables, and meat. However, prepared foods — items made and sold ready to eat, like restaurant meals, deli sandwiches, or hot food from a grocery store hot bar — are taxed.
Prescription medications are exempt. Over-the-counter medicines like aspirin or cold medicine are taxed. Medical equipment prescribed by a doctor, such as wheelchairs, crutches, or diabetic supplies, is also exempt.
Most services are not subject to sales tax in North Carolina. This includes haircuts, plumbing repairs, car repairs, and labor charges. However, if you buy a physical product as part of that service — such as parts for a repair — the parts may be taxed depending on the situation.
Clothing and shoes are taxed in North Carolina, unlike some other states. There is no clothing exemption.
Digital goods and online purchases
North Carolina taxes digital goods and digital services. This includes e-books, streaming subscriptions, downloaded software, and digital music. You pay the same sales tax rate as you would on a physical purchase in your location.
Online purchases from out-of-state retailers are subject to North Carolina sales tax if the retailer has a physical presence in the state or meets certain sales thresholds. Most large online retailers now collect and remit North Carolina sales tax automatically. If a retailer does not collect tax at checkout, you may owe use tax on that purchase when you file your state tax return, though this is rarely enforced for individual consumers.
Who collects and pays the tax
The merchant — the store, restaurant, or online retailer — is responsible for collecting sales tax from you at the point of sale. They then send that tax to the North Carolina Department of Revenue and to the appropriate local tax authority. You do not file sales tax yourself as a consumer; the business handles the collection and payment.
If you are a business owner in North Carolina, you must register for a sales tax permit with the Department of Revenue and collect tax on taxable sales. Businesses file returns monthly, quarterly, or annually depending on their sales volume.
Special situations and resale certificates
If you are a business buying goods for resale, you do not pay sales tax on those purchases. Instead, you provide the seller with a resale certificate. This certificate tells the seller that you are buying for resale and will collect tax when you sell the item to the end customer.
Nonprofit organizations may be exempt from sales tax on certain purchases. To claim this exemption, the organization must register with the Department of Revenue and provide documentation of its nonprofit status.
Farmers buying equipment and supplies for agricultural use may may have access to for exemptions on specific items. The rules vary by item and use, so farmers should contact the Department of Revenue or a tax professional for details.
Frequently Asked Questions
Is sales tax included in the price shown on the shelf?
No. The price on the shelf or in the online listing does not include sales tax. Tax is added at checkout. This is why your receipt total is higher than the labeled price.
Do I pay sales tax on used items?
Yes, used items are taxed the same way as new items in North Carolina. Whether you buy a used car, used furniture, or used clothing, sales tax applies at the rate for your location.
What is use tax?
Use tax is a tax on items you buy outside North Carolina and bring into the state for use here. It is meant to prevent people from avoiding sales tax by shopping out of state. The rate is the same as sales tax for your location. Most consumers do not pay it directly; it is primarily enforced for business purchases.
Can I return an item and get the sales tax back?
When you return an item for a refund, the sales tax is refunded along with the purchase price. If you exchange an item for another, tax is recalculated on the new purchase based on its price.
Do I pay sales tax on services like haircuts or car repairs?
No. Labor and services are generally not taxed in North Carolina. However, if the service includes physical products — such as parts in a repair or products in a salon service — those products may be taxed separately depending on the type of service and product.