North Carolina's Sales Tax Rate and What It Covers

North Carolina charges a 4.75% sales tax on most goods and some services. This is the state rate that applies statewide. However, your total sales tax bill will be higher because counties add their own local tax on top — ranging from 2% to 2.75% depending on where you live. Your final rate is the state 4.75% plus your county's local rate, which means you'll pay between 6.75% and 7.5% total at checkout.

The tax applies when you buy tangible items — clothing, groceries, electronics, furniture, and similar goods. It also applies to certain services like repairs, alterations, and installation labor. However, some categories are exempt: unprepared food you cook at home (like raw vegetables and meat), prescription medications, and medical equipment are not taxed. Prepared food from restaurants and food trucks is taxed, but unprepared groceries are not.

Key Takeaways

  • North Carolina's state sales tax is 4.75%, but your county adds 2% to 2.75% on top, making your total rate between 6.75% and 7.5%.
  • Groceries you prepare at home are not taxed, but restaurant meals and prepared foods are taxed at the full rate.
  • Prescription drugs and medical equipment are exempt from sales tax in North Carolina.
  • Services like repairs, alterations, and installation labor are subject to sales tax, though not all services are taxed.
  • Online purchases from out-of-state sellers are subject to North Carolina sales tax if the seller has a physical presence in the state.

County-by-County Local Tax Rates

Every North Carolina county adds its own local sales tax on top of the state rate. These local rates fund schools, infrastructure, and county services. The local rate you pay depends entirely on which county you're shopping in, not where you live. If you buy something in Wake County (Raleigh area), you pay Wake County's rate; if you buy the same item in Mecklenburg County (Charlotte area), you pay that county's rate instead.

Local rates range from 2% in some counties to 2.75% in others. A few counties use 2.25% or 2.5%. You can find your county's exact rate by searching "North Carolina sales tax by county" or asking a cashier — they'll know the rate for their location. The combined state and local rate is what appears on your receipt.

What Is and Isn't Taxed

Tangible goods — items you can touch and take home — are taxed. This includes clothing, shoes, electronics, furniture, toys, books, and household items. Groceries are partially taxed: unprepared food like raw meat, vegetables, bread, and milk are not taxed, but prepared foods like deli sandwiches, rotisserie chicken, and bakery items are taxed.

Services are more complicated. Labor for repairs, alterations, and installation is taxed. If you pay a tailor to hem pants or a plumber to fix a leak, that labor is subject to sales tax. However, professional services like haircuts, medical care, and legal information are not taxed. Utilities (electricity, water, gas) are not subject to sales tax either.

Exempt items include prescription medications, medical devices prescribed by a doctor, and certain mobility aids. Newspapers and magazines are not taxed. Gasoline is taxed, but the tax is built into the pump price and shown separately on your receipt.

How Sales Tax Works on Online and Out-of-State Purchases

If you order something online from a retailer that has a physical store, warehouse, or office in North Carolina, you owe North Carolina sales tax on that purchase. This applies even if you're ordering from the company's website. Large retailers like Amazon, Walmart, and Target have operations in North Carolina, so purchases from them are taxed.

If you order from a small out-of-state seller with no presence in North Carolina, the company is not required to collect sales tax at checkout. However, you are technically responsible for paying "use tax" on that purchase when you file your state income tax return — though most individuals do not report these small purchases. The rule is complex and changes based on recent court decisions, so if you're making a large purchase from an out-of-state seller, it's worth checking their tax policy before checkout.

Sales Tax on Specific Items You Might Question

Clothing and shoes are taxed at the full rate — there is no clothing exemption in North Carolina. A $50 shirt costs you the full sales tax on top of the price tag. School supplies like notebooks, pens, and folders are taxed. Textbooks are taxed if you buy them at a store; textbooks purchased directly from a college bookstore as part of a course may have different treatment depending on the institution.

Vehicles are taxed, but the tax is calculated on the sale price and handled at the DMV when you register the car, not at the dealership. Cigarettes and vaping products are taxed at the sales tax rate, plus they have additional state excise taxes on top. Alcohol (beer, wine, liquor) is taxed at the sales tax rate, plus it has separate alcohol taxes.

Frequently Asked Questions

What is my exact sales tax rate?

Add your county's local rate to North Carolina's 4.75% state rate. For example, if you live in Mecklenburg County (Charlotte), the local rate is 2.75%, so your total is 7.5%. Search "North Carolina sales tax [your county name]" or ask a store cashier for your county's exact local rate.

Are groceries taxed in North Carolina?

Unprepared groceries — raw meat, fresh vegetables, bread, milk, eggs — are not taxed. Prepared foods from restaurants, deli counters, and bakeries are taxed at the full rate. If you're unsure whether an item counts as prepared or unprepared, ask the cashier before checkout.

Do I pay sales tax on services?

Labor for repairs, alterations, and installation is taxed. Haircuts, medical visits, and legal information are not. If you're paying someone to do work on an item you own, the labor is usually taxed unless it's a professional service like healthcare or law.

Is sales tax included in the price tag?

No. The price on the tag is before tax. Sales tax is added at checkout. A $20 item will cost you $20 plus sales tax, so the final price depends on your county's rate.

Do I owe sales tax on online purchases?

If the online retailer has a physical presence in North Carolina (a store, warehouse, or office), you owe North Carolina sales tax. Most large retailers do, so tax is collected at checkout. Small out-of-state sellers may not collect it, though you may owe use tax when you file your state return.