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

Last Updated on

Quick Reference

Most businesses starting in North Carolina selling a product or offering certain services will need to register for a Sales and Use Tax Number.  This is commonly 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.

Also See: 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 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 meets one of the following scenarios:
    • Making total annual sales of tangible personal property to North Carolina residents of $100,000 or more; or
    • Shipping 200 or more transactions to North Carolina residents annually.

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 registering through the Department of Revenue online or by mailing in Form NC-BR.

Information needed to register includes:

  • Federal Employer Identification Number (FEIN) with the IRS, or 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

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

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 applications submitted online are processed immediately, while mailed in forms take up to four weeks.

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

Do you have to renew your 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 to get a North Carolina Certificate of Exemption

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 resale certificate or sales tax exemption certificate) to document the items being purchased are for resale.

Sales tax reporting

How is sales tax collected?

When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the North Carolina Department of Revenue.

How much sales tax is charged?

The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.

In addition to the statewide tax, there are additional local sales taxes that may be added by cities and counties. 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 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 is still required indicating no sales.

Business Licenses

In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in North Carolina. Learn what business licenses are needed in North Carolina.

Questions

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.

 

Subscribe Now to the 60-day Startup Challenge!

Subscribe Now to the 60-day Startup Challenge!