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 percentage is added to the price at checkout. Counties can add their own local sales tax on top of the state rate, so your total tax depends on where you shop — it ranges from 6.75% to 7.5% across the state.

The state tax applies to tangible items you can touch: clothing, groceries, electronics, furniture, and most other retail goods. It also applies to certain services like repairs, alterations, and installation work. However, some categories are taxed differently or not at all. Prescription medications are not taxed. Unprepared food from a grocery store is not taxed, but prepared food from a restaurant or deli counter is taxed at the full rate.

If you buy something online from an out-of-state seller, North Carolina sales tax still applies if the seller has a physical presence in the state or meets certain sales thresholds. This means you typically pay tax on online purchases the same way you would in a store.

Key Takeaways

  • North Carolina's base state sales tax is 4.75%, but your county adds a local tax that brings the total to between 6.75% and 7.5%.
  • Sales tax applies to most goods and some services, but not to prescription medications or unprepared grocery store food.
  • Restaurant meals, prepared foods, and services like repairs are taxed at the full rate in your county.
  • Online purchases from most major retailers are subject to North Carolina sales tax, even if the seller is out of state.

County-by-county tax rates

North Carolina's 100 counties each set their own local sales tax rate, which stacks on top of the 4.75% state rate. The lowest combined rate is 6.75% (in counties that add 2%), and the highest is 7.5% (in counties that add 2.75%). Most counties fall in the middle at 7% or 7.25%.

Your county's rate depends on local decisions made by county commissioners and is used to fund schools, infrastructure, and other county services. If you live near a county line, you may notice the tax changes when you cross it. Some people shop strategically in lower-tax counties, though the difference is usually small — a $100 purchase costs $67.50 in the lowest-tax county and $75 in the highest-tax county.

You can find your specific county rate by searching "North Carolina sales tax [your county name]" or by checking your county's tax assessor website. The rate is also printed on most receipts.

What is and is not taxed

Sales tax in North Carolina applies to most retail purchases, but the rules differ for specific categories. Clothing and shoes are taxed. Groceries are not taxed if they are unprepared — this means raw meat, produce, bread, and canned goods are tax-free. However, anything prepared or ready to eat is taxed: deli chicken, hot pizza, salad bar items, and food from a restaurant all include sales tax.

Services are taxed only in certain cases. Haircuts and salon services are taxed. Repair work on items like cars, appliances, and electronics is taxed. Installation services are taxed. However, professional services like accounting, legal advice, and medical care are generally not taxed. Prescription medications are never taxed, but over-the-counter medicines and vitamins are.

Digital goods and subscriptions have their own rules. Software, e-books, and streaming services are typically taxed. Newspapers and magazines are not taxed, whether physical or digital. If you are unsure whether a specific item is taxed, the cashier or seller can tell you, and it will show on your receipt.

How sales tax is collected and used

When you pay sales tax at checkout, the business collects it and holds it temporarily. Retailers are required to send the tax they collect to the North Carolina Department of Revenue, usually monthly or quarterly depending on their sales volume. The state then distributes the local portion to each county based on where the sale occurred.

The state keeps the 4.75% state portion for the General Fund, which pays for state services like education, transportation, and public safety. The local portion (2% to 2.75%) goes directly to the county where the purchase was made and funds county schools, roads, emergency services, and other local needs. This is why the rate varies by county — each county decides how much local tax to charge.

Businesses do not keep the sales tax. They are responsible for collecting it accurately and sending it in on time. If a business fails to send collected tax to the state, they can face penalties and interest charges.

Sales tax on specific purchases

Some purchases confuse people because the tax rules are not obvious. Here are common scenarios: A new car is taxed on the full purchase price. A used car sold by a private person is not taxed, but a used car sold by a dealer is taxed. A vehicle trade-in reduces the taxable amount — you pay tax only on the difference between the new car's price and your trade-in value.

Gasoline is taxed, but the tax is built into the pump price and does not show separately on your receipt. Lottery tickets are not taxed. Cigarettes and vaping products have their own excise tax in addition to sales tax. Alcohol purchased at a store is taxed at the sales tax rate, but alcohol served at a bar or restaurant may have different tax treatment.

If you buy something and return it, the store refunds the sales tax along with the purchase price. If you exchange an item for a different one of the same price, no new tax is charged. If you exchange for something more expensive, you pay tax only on the difference.

Tax-exempt purchases and who qualifies

Certain organizations and purchases are exempt from North Carolina sales tax. Nonprofit organizations, government agencies, and schools can buy items tax-free if they have a tax-exempt certificate. Religious organizations also may have access to for exemption on purchases related to their mission. However, these exemptions require paperwork — the organization must register with the state and provide proof of status to the seller.

Individuals do not receive a general sales tax exemption based on income or status. You pay sales tax on your purchases regardless of your financial situation. The only personal exemption is for prescription medications, which are tax-free for everyone.

If you are buying something for a nonprofit or tax-exempt organization, ask the seller whether they accept a tax-exempt certificate. Not all sellers are set up to process them, so it is worth asking before you shop.

Frequently Asked Questions

Does North Carolina tax groceries?

Unprepared food from a grocery store is not taxed — this includes raw meat, produce, bread, canned goods, and frozen vegetables. Prepared or ready-to-eat food is taxed at the full rate, including deli items, hot foods, and anything from a restaurant or food service counter.

What is the sales tax rate where I live?

North Carolina's state rate is 4.75%, and your county adds 2% to 2.75% on top of that, bringing your total to between 6.75% and 7.5%. Search online for "North Carolina sales tax [your county name]" to find your exact rate, or check a recent receipt.

Do I pay sales tax on online purchases?

Yes, most online purchases are subject to North Carolina sales tax if the seller has a physical presence in the state or meets certain sales thresholds. Major retailers like Amazon, Walmart, and Target collect and send sales tax to North Carolina automatically.

Is sales tax added to the price shown online?

No, the price shown online usually does not include sales tax. Tax is calculated and added at checkout based on your shipping address. This is why the final total is higher than the listed price.

Can I get a refund of sales tax I already paid?

If you return an item within the store's return window, you receive a refund of both the purchase price and the sales tax. If you bought something and cannot return it, you cannot recover the sales tax you paid.