North Carolina's statewide sales tax rate is 4.75 percent
When you buy something in North Carolina, the state charges 4.75 percent sales tax on most goods. This is the base rate that applies everywhere in the state. However, your actual tax at checkout will often be higher because counties and cities can add their own local sales taxes on top of the state rate.
The total tax you pay depends on where you are shopping. A purchase in one county might cost you 7 percent in tax, while the same item in another county costs 7.25 percent. This variation exists because North Carolina allows local governments to set their own rates within limits set by state law.
Key Takeaways
- North Carolina's state sales tax is 4.75 percent, but your total tax rate includes local additions that vary by county and city.
- Local sales taxes in North Carolina range from 2 to 2.5 percent added to the state rate, bringing totals between 6.75 and 7.25 percent depending on location.
- Most tangible goods are taxed, but groceries, prescription medications, and medical equipment are generally exempt from sales tax.
- Services like haircuts, repairs, and professional fees are typically not subject to sales tax in North Carolina.
How local taxes add to the state rate
North Carolina divides its counties into different tax districts, and each district sets its own local sales tax rate. Most counties charge either 2 percent or 2.5 percent on top of the state's 4.75 percent. This means your total sales tax is most likely either 6.75 percent or 7.25 percent, depending on which county you are in.
Some counties have multiple tax rates within their borders. For example, a city might have a different rate than the surrounding county area. When you shop, the tax rate that applies is the one where the business is located, not where you live. If you cross a county line to shop, you pay that county's rate.
You can find your specific local rate by entering your address on the North Carolina Department of Revenue website, or by asking a cashier at any store in your area. Most receipts also show the exact tax rate charged.
What items are not taxed in North Carolina
Groceries are not subject to sales tax in North Carolina. This includes food you buy at a supermarket or grocery store — bread, milk, vegetables, meat, and other items meant to be eaten at home. Prepared foods and restaurant meals are taxed, but raw groceries are not.
Prescription medications are exempt from sales tax. Over-the-counter medicines like pain relievers and cold medicine are taxed, but drugs that require a prescription from a doctor are not. Medical equipment prescribed by a doctor, such as wheelchairs or diabetic supplies, is also exempt.
Clothing and shoes are taxed in North Carolina, unlike some other states. There is no clothing exemption, so a shirt or pair of pants is subject to the full local and state sales tax rate.
Services that are not subject to sales tax
Most services in North Carolina are not taxed. A haircut, car repair, plumbing work, or dental cleaning does not have sales tax added. Professional services like accounting, legal information, or medical visits are also not taxed. The general rule is that you pay sales tax on things you can touch and take home, not on work someone does for you.
There are exceptions. Labor charges that are bundled with taxable goods — such as installation of carpet or assembly of furniture — may be taxed depending on how the business structures the invoice. If you are unsure whether a service charge will be taxed, ask the business before you pay.
How sales tax appears on your receipt
When you check out at a store, the sales tax is calculated on the subtotal of taxable items and added to your bill. The receipt shows the subtotal, the tax amount, and the total you owe. If you bought both taxable and non-taxable items — for example, groceries and a magazine — the tax is applied only to the magazine.
Online purchases from retailers based in North Carolina are subject to sales tax. Retailers based outside North Carolina may or may not collect tax depending on their size and sales volume in the state. If tax is not collected at checkout, you may owe it when you file your state income tax return, though most individual shoppers do not report this.
Special situations and exemptions
Certain organizations are exempt from paying sales tax. Non-profit organizations, government agencies, and religious institutions can often purchase items tax-free by providing a resale certificate or exemption form. Businesses that buy items to resell can also avoid paying sales tax by providing a resale certificate to the seller.
If you believe an item was incorrectly taxed, you can ask the store manager or contact the North Carolina Department of Revenue. Mistakes do happen, and stores are required to correct them. Keep your receipt as proof of the transaction.
Frequently Asked Questions
What is the total sales tax rate where I live?
Your total rate is 4.75 percent plus your local county or city rate, which is either 2 or 2.5 percent. This brings your total to either 6.75 or 7.25 percent. You can find your exact rate by entering your address on the North Carolina Department of Revenue website or by checking a recent receipt from a store in your area.
Do I pay sales tax on groceries?
No. Groceries purchased for home consumption are not taxed in North Carolina. This includes bread, produce, meat, dairy, and other food items from a supermarket. Restaurant meals and prepared foods are taxed, but raw groceries are not.
Is sales tax charged on online purchases from North Carolina businesses?
Yes. If you buy from a retailer based in North Carolina, sales tax is charged based on the delivery address. If you buy from a retailer outside North Carolina, tax may or may not be collected depending on that retailer's size and sales in the state.
Are prescription medications taxed?
No. Prescription medications are exempt from sales tax in North Carolina. Over-the-counter medicines like aspirin or cough syrup are taxed, but drugs that require a prescription are not.
Do I pay sales tax on a haircut or car repair?
No. Services like haircuts, car repairs, plumbing, and medical visits are not subject to sales tax. You pay sales tax on goods you purchase, not on labor or services performed for you.