North Carolina's statewide sales tax rate is 4.75 percent

North Carolina charges a 4.75 percent sales tax on most retail purchases. This is the base rate that applies statewide. However, your actual tax at checkout may be higher because counties can add their own local sales tax on top of the state rate. The total you pay depends on where you make the purchase.

The state rate has been 4.75 percent since 2011. It applies to tangible goods — items you can touch and take home — and to certain services. Food, medicine, and utilities have different rules, which are covered below.

Key Takeaways

  • North Carolina's state sales tax is 4.75 percent, but your county may add 0.5 to 2.75 percent on top of that, making your total rate between 4.75 and 7.5 percent depending on location.
  • Groceries and prescription medications are not taxed in North Carolina, but prepared food, candy, and over-the-counter medicine are taxed at the full rate.
  • Utilities like electricity and natural gas are taxed at a lower rate of 3 percent instead of the full 4.75 percent.
  • Services such as haircuts, repairs, and professional fees are generally not subject to sales tax unless they involve selling a physical product.

County and local add-on taxes vary by location

Most North Carolina counties charge an additional local sales tax on top of the 4.75 percent state rate. These county rates range from 0.5 percent to 2.75 percent. The combined rate you pay at the register is the state rate plus your county's rate.

For example, if you shop in Mecklenburg County (Charlotte), you pay 4.75 percent state tax plus 2.25 percent county tax, for a total of 7 percent. In Wake County (Raleigh), the county adds 2 percent, bringing the total to 6.75 percent. Some rural counties add only 0.5 percent, resulting in a total of 5.25 percent. The county where you make the purchase is what matters, not where you live.

You can find your county's specific rate by searching "North Carolina sales tax by county" or by asking a cashier. The North Carolina Department of Revenue maintains a complete list organized by county.

What is and is not taxed

Not taxed: Groceries (unprepared food you cook at home), prescription medications, and medical devices prescribed by a doctor. Utilities — electricity, natural gas, water, and sewer — are taxed at 3 percent, not the full sales tax rate.

Taxed at full rate: Prepared food (restaurant meals, deli items, hot food from a grocery store), candy, soft drinks, over-the-counter medicine, clothing, electronics, furniture, and most other retail goods. Services like haircuts, car repairs, and plumbing are generally not taxed, but if a service includes selling you a product (like a mechanic who sells you parts), the product portion is taxed.

The line between groceries and prepared food can be unclear. A rotisserie chicken from a grocery store deli is taxed. A frozen pizza you heat at home is not. When in doubt, the item's temperature and whether it requires further preparation matter: if it is ready to eat as-is, it is usually taxed.

Online and out-of-state purchases

North Carolina requires online retailers to collect and send sales tax on purchases shipped to addresses in the state. This applies whether the retailer is based in North Carolina or elsewhere. Most major online retailers — Amazon, Walmart, Target, and others — now collect North Carolina sales tax at checkout.

If you buy from a small online seller who does not collect North Carolina sales tax, you are technically responsible for paying "use tax" to the state. Use tax is the same rate as sales tax and is owed on items you bring into North Carolina or have shipped here. In practice, most individuals do not report use tax, but the obligation exists.

Tax-exempt purchases and resale certificates

Certain organizations do not pay sales tax on purchases. Religious nonprofits, schools, and government agencies can buy items tax-free by providing a resale certificate or tax-exempt certificate to the seller. These certificates must be issued by the North Carolina Department of Revenue.

Individuals do not receive tax-exempt status. If you are buying for personal use, you pay sales tax regardless of your income or circumstances. Resale certificates are only for businesses buying inventory to resell or for may have access to nonprofits and government entities.

How sales tax is collected and reported

Retailers collect sales tax from customers and send it to the North Carolina Department of Revenue. The state then distributes a portion to counties and municipalities. Retailers are responsible for calculating the correct rate based on the customer's location and the type of item being purchased.

If you notice a retailer charging the wrong rate or not charging tax when they should, you can report it to the North Carolina Department of Revenue. Errors sometimes happen, especially with online orders or when a retailer is unfamiliar with North Carolina's rules.

Frequently Asked Questions

What is the total sales tax rate where I live?

Add your county's local rate to North Carolina's 4.75 percent state rate. For example, if your county adds 2 percent, your total is 6.75 percent. You can find your county's rate by searching online or asking a retailer in your area.

Why is my receipt showing a different tax rate than I expected?

The tax rate depends on the county where you made the purchase, not where you live. If you shopped in a different county, the rate will be different. Also, some items like groceries and prescription drugs are not taxed, which lowers the total.

Do I have to pay sales tax on clothes and shoes?

Yes. North Carolina taxes clothing and shoes at the full sales tax rate. There is no clothing exemption in the state.

Is restaurant tax the same as regular sales tax?

Yes. Restaurant meals are taxed at the same rate as other purchases — your county's rate plus 4.75 percent. Some counties also charge a separate meals tax on top of sales tax, so the total can be higher than the regular sales tax rate.