How North Carolina Sales Tax Works

North Carolina charges a 4.75% state sales tax on most goods and some services

North Carolina's base sales tax rate is 4.75%, which applies to tangible personal property — things you can touch and take home. This is the rate you see on price tags at checkout. However, North Carolina also allows counties to add a local sales tax on top of the state rate, so your total tax depends on where you shop. Some counties add 2%, others add 2.5%, and a few add different amounts. The total you pay ranges from 6.75% to 7.5% depending on your location.

The state collects this tax from retailers, who then send it to the North Carolina Department of Revenue. You do not send in sales tax yourself unless you are a business owner collecting it from customers. If you are a consumer buying items, the tax is calculated and added at the register.

Key Takeaways

• North Carolina's state sales tax is 4.75%, but your county may add 2% to 2.5% more, making your total tax rate between 6.75% and 7.5%.
• Sales tax applies to most physical goods but not to groceries, prescription medications, or most services like haircuts and repairs.
• Some items are taxed differently — clothing under $100 per item is tax-free, but clothing over $100 is taxed on the full amount.
• Restaurants and prepared food are taxed, but unprepared groceries from a store are not.
• If you buy something online from an out-of-state seller, North Carolina sales tax may still explore depending on where the seller is located.

What is and is not taxed in North Carolina

North Carolina exempts certain items from sales tax entirely. Groceries — unprepared food you cook at home — are not taxed. This includes bread, milk, vegetables, meat, and canned goods. However, prepared food, hot food, and food you eat at a restaurant or food truck are taxed at the full rate.

Prescription medications are not taxed, but over-the-counter drugs like aspirin and cold medicine are. Medical equipment such as wheelchairs, hearing aids, and diabetic supplies are also exempt.

Most services are not taxed in North Carolina. Haircuts, car repairs, plumbing, electrical work, and house cleaning do not have sales tax. However, some services are taxed — for example, pest control and certain telecommunications services do carry tax.

Clothing has a special rule. Items of clothing under $100 per piece are tax-free. If you buy a shirt for $80, there is no tax. But if you buy a coat for $150, you pay tax on the full $150. This applies to shoes, hats, and accessories too.

County-level tax rates vary across the state

While the state rate is always 4.75%, each county in North Carolina sets its own local sales tax rate. Most counties add 2%, bringing the total to 6.75%. Some counties add 2.5%, making the total 7.25%. A few counties have different rates. For example, some counties in the western part of the state may have slightly different local rates than those in the east.

You can find your county's rate by looking at your receipt or by contacting your county's tax office. The North Carolina Department of Revenue also publishes a list of all county rates on its website. If you shop near a county line, the tax rate depends on where the store is located, not where you live.

How sales tax applies to online and mail orders

If you order something online from a North Carolina business, North Carolina sales tax applies. The seller calculates and charges the tax based on the delivery address you provide.

If you order from an out-of-state seller, the rules depend on whether that seller has a physical presence in North Carolina. Large online retailers like Amazon and Walmart collect North Carolina sales tax on orders shipped to North Carolina addresses. Smaller sellers may not, though this has changed in recent years as more states require remote sellers to collect tax.

If you buy something online and no tax was charged, you are technically responsible for paying what is called "use tax" to North Carolina — it is the same rate as sales tax. However, most individual consumers do not report use tax on their returns. This is a gray area, and the state does not typically pursue individual consumers for small purchases.

What happens if you do not pay sales tax

As a consumer, you do not pay sales tax directly — the retailer collects it and sends it to the state. If a retailer fails to collect or send in the tax they owe, that is between the retailer and the Department of Revenue, not you. You are not responsible for checking whether the tax was actually paid.

If you are a business owner collecting sales tax from customers, you must send it to the state on time. North Carolina requires most businesses to file monthly or quarterly, depending on how much tax they collect. Failing to send in collected tax can result in penalties, interest, and legal action by the Department of Revenue.

Sales tax on specific situations

Vehicles: Car sales are taxed at the full sales tax rate on the purchase price. If you buy a used car for $10,000, you pay sales tax on that $10,000. Trade-ins do reduce the taxable amount — if you trade in a car worth $3,000 toward a $10,000 purchase, you pay tax only on the $7,000 difference.

Alcohol: Beer, wine, and liquor are subject to sales tax in addition to excise taxes that North Carolina charges on alcohol. The sales tax applies to the full price.

Utilities: Electricity, natural gas, and water are not subject to sales tax in North Carolina.

Subscriptions: Digital subscriptions like streaming services, software, and online memberships are generally not taxed, though this varies by the type of service and how it is classified.

Frequently Asked Questions

Why is my sales tax different from the person next to me at checkout?

You may live in different counties. If you are in Wake County, the rate is 6.75%. If you are in Mecklenburg County, it is 7.25%. Even stores in the same city can have different rates if they are near a county line. Check your receipt to see your local rate.

Do I pay sales tax on clothes under $100?

No. Any single item of clothing under $100 is tax-free in North Carolina. This includes shirts, pants, shoes, and hats. If the item costs $100 or more, the full amount is taxed. A $99 jacket is free; a $101 jacket is taxed on the full $101.

Is restaurant food taxed?

Yes. Any food you eat at a restaurant, food truck, or café is taxed at the full sales tax rate. Unprepared groceries from a store are not taxed, but prepared or hot food is.

Do I owe sales tax on things I buy online from out of state?

If the seller collects North Carolina tax at checkout, you have already paid it. If they do not, you technically owe use tax to North Carolina at the same rate. Most individual consumers do not report this on their taxes, and the state does not pursue small purchases.

Are prescription drugs taxed?

No. Prescription medications are exempt from sales tax. Over-the-counter drugs like cold medicine and pain relievers are taxed, as are vitamins and supplements.