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. Many counties and cities layer on their own local sales taxes on top of the state rate, so your total can range from 6.75% to 7.5% depending on where you shop.
The state tax applies to tangible items — clothing, groceries, electronics, furniture — and to certain services like repairs, alterations, and telecommunications. Some services are taxed, others are not. A haircut is taxed. An accountant's fee is not. The difference often comes down to whether the service produces a physical result or involves personal labor only.
Food for home consumption is generally not taxed in North Carolina. That means groceries you buy to cook at home stay at their shelf price. But prepared food — restaurant meals, deli items ready to eat, hot food from a bakery — is taxed at the full rate.
Key Takeaways
- North Carolina's base state sales tax is 4.75%, but your county or city may add 1% to 2.75% more, making your total tax rate between 6.75% and 7.5%.
- Groceries for home cooking are not taxed, but prepared food, restaurant meals, and hot items from bakeries are taxed at the full rate.
- Clothing and most goods are taxed, but services vary — some like repairs are taxed, while others like accounting fees are not.
- The tax is collected by the seller at the point of sale and sent to the state and local tax authorities.
Local sales tax rates by county
North Carolina allows each county to set its own local sales tax rate on top of the state's 4.75%. This local portion ranges from 1% to 2.75% depending on the county. Some counties use the full amount allowed; others use less.
Your total sales tax rate depends on where the sale happens, not where you live. If you live in one county but shop in another, you pay that county's combined rate. Online purchases are more complicated — the seller's location and the buyer's location both matter, and the rules changed in 2018 when federal law required online retailers to collect sales tax.
You can find your county's local rate by contacting your county tax assessor's office or checking the North Carolina Department of Revenue website. The combined rate is what you see on your receipt.
What is and is not taxed in North Carolina
Most physical goods are taxed: clothing, shoes, furniture, appliances, books, toys, and electronics. Groceries for home use are the major exception. Prescription medications are not taxed. Over-the-counter medicines and vitamins are taxed.
Services fall into two categories. Taxable services include repairs (car, appliance, clothing), alterations, cleaning, pest control, and telecommunications. Non-taxable services include medical and dental care, legal services, accounting, and personal training. The rule is not always obvious — when in doubt, the seller should know whether their service is taxed in North Carolina.
Digital products — e-books, software, streaming subscriptions, and digital downloads — are taxed. Newspapers and magazines in print are not taxed, but digital subscriptions are. Rental of tangible goods (like a car or equipment) is usually taxed.
Who collects and where the money goes
The seller — the store, restaurant, or service provider — collects the sales tax from you at the point of sale. They hold it and send it to the state and local tax authorities on a schedule set by the Department of Revenue. Most sellers report and pay monthly, though some larger retailers may report more frequently.
The state keeps the 4.75% portion. The local portion goes to the county and city where the sale occurred. Counties use this money for schools, roads, public safety, and other services. The split between county and city varies by location.
If you believe a seller did not charge you the correct tax, you can report it to the North Carolina Department of Revenue. Sellers who do not collect and remit sales tax can face penalties and interest.
Sales tax on specific items and situations
Clothing and shoes: All clothing and footwear are taxed, with no dollar limit. A $5 t-shirt and a $500 coat are both taxed at the full rate.
Motor vehicles: Cars, trucks, and motorcycles are subject to sales tax when purchased from a dealer. The tax is calculated on the sale price. Trade-ins reduce the taxable amount — you pay tax only on the difference between the new vehicle's price and your trade-in value.
Gasoline and fuel: Gasoline is taxed at the pump through the state's fuel tax, which is separate from sales tax. You do not see a separate sales tax line on a gas receipt, but the fuel tax is built into the price.
Alcohol: Beer, wine, and liquor are subject to sales tax in addition to state excise taxes. The excise tax is set by the state and varies by type of alcohol; the sales tax is added on top.
How sales tax affects your budget and receipts
Sales tax is added after the price tag, so a $100 item will cost you more at checkout. In most of North Carolina, that $100 item will cost between $106.75 and $107.50 depending on your county. Over time, this adds up — a family spending $500 a month on taxable goods pays $30 to $37.50 in sales tax each month.
Your receipt should show the subtotal, the tax amount, and the total. If you are making a large purchase or buying for a business, keep your receipt. Sales tax paid on business purchases may be deductible or recoverable depending on your business structure and the type of purchase.
If you are buying items across state lines or online, the tax rules depend on where the seller is located and where you are. North Carolina requires online sellers to collect tax on purchases shipped to North Carolina addresses, but some smaller sellers may not yet comply.
Frequently Asked Questions
Do I pay sales tax on groceries?
No, groceries for home cooking are not taxed in North Carolina. This includes bread, milk, vegetables, meat, and canned goods. Prepared foods — rotisserie chicken, deli sandwiches, hot pizza, items from a bakery's hot case — are taxed. The rule is whether the food is ready to eat or requires cooking.
What is the total sales tax rate where I live?
Your total rate is the state's 4.75% plus your county's local rate, which ranges from 1% to 2.75%. Contact your county tax assessor's office or check the Department of Revenue website to find your exact combined rate. The rate depends on where you make the purchase, not where you live.
Do I have to pay sales tax on online purchases from North Carolina sellers?
Yes. Since 2018, online retailers are required to collect and remit North Carolina sales tax on purchases shipped to addresses in the state. You should see the tax added at checkout. If you do not, contact the seller — they may not be complying with state law.
Are services taxed in North Carolina?
Some services are taxed and some are not. Repairs, alterations, cleaning, and telecommunications are taxed. Medical care, legal services, and accounting are not. When you hire a service provider, ask them whether their service is subject to sales tax in North Carolina.
Can I get a refund of sales tax I paid?
Consumers generally cannot get a refund of sales tax paid on personal purchases. Businesses may be able to recover sales tax on certain purchases depending on their structure and use. If you believe you were overcharged, contact the seller first, then the Department of Revenue if the issue is not resolved.