State Sales Tax Rates

State Sales Tax Rates North Carolina State Sales Tax 2014

North Carolina Sales Tax 2014
North Carolina State Sales Tax for 2014 Maximum Municipal Sales Tax

5.75%

2.50%

What is the North Carolina Sales Tax?

The North Carolina state sales tax is 5.75%, with a maximum possible sales tax (including local and municipal sales taxes) of 8.25%.

Local governments in North Carolina are allowed to add a local sales tax of up to 2.5 percent on top of the NC state sales tax for all qualifying sales in their jurisdiction - so the actual sales tax paid on any purchase in North Carolina can be up to 8.25% depending on location.

Most counties in North Carolina add a 2% local sales tax rate to the NC state sales tax, with the maximum sales tax of 8.25% collected in Mecklenburg County. North Carolina collects excise taxes on a variety of items, including 30.2 cents per gallon on gas, 79 cents a gallon on wine, 53 cents a gallon on beer, and 45 cents a pack on cigarettes. Most non-prepared foods and groceries are taxed at a reduced state sales tax rate of 2%, plus county sales tax.

To encourage back to school shopping, North Carolina holds an annual sales tax holiday for three days starting on the first Friday in August. This tax holiday allows customers to purchase school supplies, clothes, shoes, sports equipment, computers, and other materials sales-tax free.

What sales are exempt from the North Carolina Sales Tax?

North Carolina Sales and Use Tax Rates

Many states set special sales tax rates for certain types of goods like groceries or clothes, and may completely exempt certain transactions from state and local sales taxes. North Carolina completely exempts prescription drugs from the North Carolina state sales tax.

North Carolina sets a special sales tax rate for unprepared food and groceries (at 2%). Like many other states, North Carolina levies a special sales tax on prepared food from restaraunts or other locations. The North Carolina restaraunt sales tax is 9.25%.

Generally, the North Carolina sales tax is collected only from the end consumer, or the end user of the product. Customers buying products in bulk, as a business-to-business transaction, or buying with the intent to resell do not have to pay the North Carolina sales tax if they provide the seller with a North Carolina Sales Tax Exemption Certificate at the time of purchase. Most states will accept the Uniform Sales and Use Tax Certificate for this purpose, which is available from the Multistate Tax Commission here.

Internet Sales Tax, or tax on purchases made over the internet, is currently a gray area in many states' tax codes. While most states can collect sales tax on internet purchases made within the state (the vendor and consumer are both located in North Carolina), taxation of interstate internet transactions is much more complicated.

Currently New York, Rhode Island, North Carolina, Colorado, and Illinois have some form of online sales tax that also handles interstate transactions. For details on how North Carolina handles taxation of online sales, read more about online sales taxes in the United States.

Resources:

[1] Table of state sales taxes on Wikipedia
http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States#By_jurisdiction

[2] North Carolina sales tax information on Tax-Rates.org
http://www.tax-rates.org/North Carolina/sales-tax

[3] Table of state sales, use, and excise taxes by The Tax Foundation
http://www.taxfoundation.org/taxdata/show/245.html

[4] State level taxation resources on IRS.gov
http://www.irs.gov/businesses/small/article/0,,id=99021,00.html