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How To Register For A North Carolina Sales And Use Tax Number

How To Register For A North Carolina Sales And Use Tax Number

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How To Register For A North Carolina Sales And Use Tax Number

Most businesses starting in North Carolina selling a product or offering certain services will need to register for a North Carolina Sales and Use Tax Number.  This number is also referred to as a sales tax number, seller’s permit, sales tax license, sales tax number, or sales tax registration.   

The Sales and Use Tax Number is obtained through the North Carolina Department of Revenue as a part of the North Carolina Business Registration Application. This registration combines registration for sales and use tax and income tax withholding.

Check out the rest of this guide to find out who needs a Sales and Use Tax Number, what products and services are taxable, how to register for a permit, and reporting requirements.

Related: Guide to starting a business in North Carolina

Who needs a Sales and Use Tax Number in North Carolina?

A business must register for a Sales and Use Tax Number in North Carolina when:

  • A business has a sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office, using a fulfillment center for shipping, or a warehouse for the storage of inventory.
  • Making retail sales of tangible personal property.
  • Selling and providing taxable services.
  • Renting or leasing taxable tangible personal property.
  • Selling certain digital property at retail.
  • Operating a dry cleaner, laundry, or other similar business.
  • Operating a hotel, motel, or similar business.
  • Selling tangible personal property, certain digital property, or providing a taxable service at a specialty market or other event.
  • Selling taxable service contracts.
  • Charging admission to an entertainment activity.
  • A remote seller who sells over $100,000 in physical goods or ships over 200 transactions annually to residents in North Carolina.

What products and services are taxable in North Carolina?

Physical products

There are a few exceptions, but almost all physical products are taxable when sold at retail in the state of North Carolina. Common examples include:

  • General merchandise like furniture, appliances, and clothing
  • Titled or registered items like vehicles

Some groceries, prescriptions, medical supplies, and equipment used in R&D are tax-exempt. See the full list of items exempt from sales tax in North Carolina.

Digital Products

Digital products are considered tangible personal property and are taxable.

Services

Most services aren’t taxable in North Carolina, however, there are a few exceptions, some of which include:

  • Dry cleaning and laundry services
  • Admission charges to an entertainment activity
  • Service contracts
  • Repair, maintenance, and installation services

How to register for a Sales and Use Tax Number in North Carolina

A Sales and Use Tax Number can be obtained by filling out the Business Registration Application through the North Carolina Department of Revenue or by mailing Form NC-BR.

Information needed to register includes:

  • Federal Employer Identification Number (FEIN) with the IRS, or the owner’s Social Security Number if a sole proprietorship with no employees
  • Type of business entity: sole proprietorship, partnership, Corporation, Limited Liability Company (LLC)
  • North Carolina Secretary of State Number (only for corporations and LLCs)
  • Business name
  • Doing Business As or Trade Name if there is one
  • Physical and mailing address of the business, phone, and email.
  • Name, title, Social Security Number, and address of owners/officers/members
  • The date the business will begin taxable activities
  • Description of what products or services are being sold
  • Accounting method (cash or accrual)
  • The estimated amount of sales tax collected each month

Sales tax reporting

How is sales tax collected?

When a business sells a taxable product or service, it charges the appropriate sales tax rate to the customer. The business collects this tax, which it then sends to the North Carolina Department of Revenue.

How much is sales tax in North Carolina?

If the purchase is made at a store or in a mobile location, the sales tax rate varies depending on where the sale took place in North Carolina. In addition to the statewide sales tax, cities and counties may add additional sales taxes. When shipping in-state, the sales tax is based on the purchaser’s address.

To find sales tax rates, see the North Carolina Department of Revenue’s sales tax rate tables.

When are North Carolina sales tax returns due?

The Department of Revenue will determine a filing frequency based on the expected sales volume, which will be monthly or quarterly. Generally, a business collecting between $100 and $20,000 in sales taxes each month will file monthly.

Wholesale businesses aren’t required to report, and seasonal businesses will file during the year they generate sales.

Filings are due on the 20th day of each month following the reporting period unless the 20th falls on a weekend or federal holiday, which would move to the next business day.

Even if the business had no sales during the reporting period, a filing indicating no sales is still required.

North Carolina Sales Tax Registration FAQs

How much does a North Carolina Sales and Use Tax Number cost?

There is no cost for a Sales and Use Tax Number in North Carolina.

How long does it take to get a North Carolina Sales and Use Tax Number?

Most North Carolina sales tax applications submitted online are processed immediately, while mailed-in forms can take up to four weeks.

After you register, the North Carolina Department of Revenue will send you a Certificate of Registration and the sales and use account ID.

Do you have to renew a North Carolina Sales and Use Tax Number?

The Sales and Use Tax Number is a one-time registration, and no renewals are needed. Be mindful that if any information about the business changes, such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the Department of Revenue.

How do I get a wholesale license in North Carolina?

A business can purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or vendor to the retailer, who will then charge sales tax to the end-user of the item.

Wholesalers and distributors will require a sales tax number and fill out a North Carolina Certificate of Exemption (also referred to as a wholesale license, resale certificate, or sales tax exemption certificate) to document that the items being purchased are for resale.

Is a business license the same thing as a sales tax license?

No – A business license and a sales tax permit serve distinct purposes.
A business license authorizes the operation of a business within a particular jurisdiction, ensuring compliance with local laws and regulations. On the other hand, a sales tax permit enables a business to legally collect sales tax from customers, which is then remitted to the state government. Typically, businesses require both a license and a permit to operate fully within the law.

Related: What business licenses are needed in North Carolina

If you have questions about the Sales and Use Tax Number, the North Carolina Department of Revenue has a handy Sales and Use Tax FAQ page.  The NCDOR can also be contacted by calling 877-252-3052.

How To Register For A North Carolina Sales And Use Tax Number

How To Register For A North Carolina Sales And Use Tax Number

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