North Carolina's sales tax rate and what it covers

North Carolina charges a 4.75% state sales tax on most goods and some services. When you buy something at a store, that 4.75% is added to your bill at checkout. However, your total sales tax is usually higher because counties add their own tax on top — most North Carolina counties add between 2% and 2.75%, bringing your total to somewhere between 6.75% and 7.5% depending on where you shop.

The state tax applies to tangible goods — clothing, electronics, furniture, groceries at the register. It also applies to certain services like repairs, alterations, and installation. Some services are not taxed: haircuts, medical services, and legal information do not have sales tax added. Groceries sold for home consumption are taxed at a lower rate of 0% on most items, though prepared foods and certain non-food items in a grocery store are taxed at the full rate.

A few categories are always exempt from sales tax in North Carolina. Prescription medications, medical equipment, and items sold to nonprofit organizations do not trigger sales tax. If you are buying for resale — you own a business and are purchasing inventory — you can provide a resale certificate to avoid paying sales tax at the point of purchase.

Key Takeaways

  • North Carolina's state sales tax is 4.75%, but your county adds 2% to 2.75% on top, making your total between 6.75% and 7.5%.
  • Sales tax applies to most goods and some services like repairs and installation, but not to haircuts, medical care, or legal services.
  • Groceries for home consumption are not taxed, but prepared foods and restaurant meals are taxed at the full rate.
  • If you own a business and buy inventory for resale, you can provide a resale certificate to avoid paying sales tax.
  • Online purchases from out-of-state sellers are subject to North Carolina sales tax if the seller has a physical presence in the state or meets certain sales thresholds.

County-level tax rates vary across the state

North Carolina does not have a single statewide sales tax rate because each county sets its own local tax on top of the state's 4.75%. This means the total you pay depends on which county you are shopping in. Mecklenburg County (Charlotte) charges 2.25% local tax, bringing the total to 7%. Wake County (Raleigh) charges 2.75%, making the total 7.5%. Guilford County (Greensboro) charges 2%, for a total of 6.75%.

Some counties have different rates for different types of purchases. A few counties tax prepared food at a different rate than other goods, or have special rates for certain categories. Before making a large purchase, you can check your county's rate on the North Carolina Department of Revenue website or ask the retailer what the local rate is in that location.

How online and out-of-state purchases are taxed

If you buy something online from a retailer that has a warehouse, office, or other physical location in North Carolina, that retailer must collect North Carolina sales tax from you at checkout. If the seller has no physical presence in the state but ships to you in North Carolina and their annual sales to North Carolina customers exceed a certain threshold, they must also collect the tax. Most large online retailers — Amazon, Walmart, Target — collect North Carolina sales tax on orders shipped to the state.

If you buy from a small out-of-state seller with no North Carolina presence and no significant sales to the state, they may not collect tax at checkout. In that case, you are technically responsible for paying "use tax" — which is the same rate as sales tax — when you file your state income tax return. Most individual shoppers do not report this, but businesses are expected to track and report use tax on their returns.

What happens when you buy services instead of goods

Services are taxed differently than goods in North Carolina. If you hire someone to repair your car, install flooring, or alter clothing, that labor is subject to sales tax. The tax applies to the entire bill — parts and labor together. However, some services are never taxed: a doctor's visit, a lawyer's consultation, or a haircut do not have sales tax added.

The line between taxed and untaxed services can be unclear. If you buy a service that includes both taxable and nontaxable elements, the retailer or service provider should break down the bill to show which parts are taxed. If you are unsure whether a service you are paying for should have tax on it, you can contact the North Carolina Department of Revenue or ask the business directly.

Resale certificates and business purchases

If you own a business and buy goods that you will resell to customers, you should not pay sales tax on those purchases. Instead, you provide the seller with a resale certificate — a form that tells the seller you are buying for resale, not for your own use. The seller keeps the certificate on file and does not charge you sales tax.

To get a resale certificate, you register with the North Carolina Department of Revenue and receive a resale certificate number. You can then provide this number to any seller when you make a purchase for resale. The certificate is free and does not expire, but you must keep records of which sellers you have given it to. If you use a resale certificate for personal purchases or items you are not reselling, you can face penalties.

Food and grocery purchases have special rules

Most groceries — bread, milk, vegetables, meat, canned goods — are not subject to sales tax in North Carolina when you buy them for home consumption. This applies whether you shop at a supermarket, a farmers market, or a convenience store. However, the moment food is prepared for when ready consumption, it becomes taxable. A rotisserie chicken from the grocery store deli, a sandwich from the deli counter, or a hot pizza are all taxed at the full rate.

Certain items sold in grocery stores are taxed even though they are food-related. Vitamins, dietary supplements, and pet food are taxed at the full rate. Alcohol and tobacco are also taxed. If you are unsure whether a specific item is taxed, the receipt will show it — taxed items will have the tax amount listed separately.

Frequently Asked Questions

What is the total sales tax rate where I live in North Carolina?

Your total rate is 4.75% (state) plus your county's local rate. Most counties charge between 2% and 2.75% local tax. You can find your county's exact rate on the North Carolina Department of Revenue website or by asking a local retailer. Your receipt will also show the total tax charged.

Do I have to pay sales tax on groceries?

Most groceries for home consumption are not taxed — milk, bread, vegetables, and meat are all tax-free. Prepared foods like deli sandwiches, rotisserie chicken, and restaurant meals are taxed at the full rate. Vitamins, supplements, and pet food are also taxed.

Can I avoid sales tax by ordering online from out of state?

Not usually. Most large online retailers collect North Carolina sales tax on orders shipped to the state. Small sellers with no North Carolina presence may not collect tax, but you are responsible for reporting use tax on your state income tax return. The tax rate is the same whether collected at checkout or reported later.

How do I get a resale certificate for my business?

Register with the North Carolina Department of Revenue online or by mail. Once registered, you receive a resale certificate number that you provide to sellers when buying inventory for resale. The certificate is free and does not expire, but you must keep records of where you have used it.

Are services always taxed in North Carolina?

No. Repairs, installation, and alterations are taxed, but medical services, legal information, and haircuts are not. If you are unsure whether a specific service is taxed, ask the business or contact the North Carolina Department of Revenue.