State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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North-Carolina (NC)

NC Sales Tax - Name of Tax and General Application:

North Carolina imposes a tax on the privilege to sell tangible personal property or certain services at the retail level in the state. This tax is known as a "sales tax" or "privilege tax". Additionally there is a tax imposed on storage, use or consumption of tangible personal property or certain services purchased inside or outside of the state. This tax is known as a "use tax" and does not apply in situations where sales tax has already been collected.

NC Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

In North Carolina, nexus is incurred by conducting advertising using direct mail, catalogs, computer-assisted shopping, or other media in the state; by purposefully or systematically exploiting North Carolina retail markets; or by the presence of intangible assets such as a trademark or the licensing of software.

NC Local Tax - Do Localities Impose Tax?

Yes, North Carolina imposes local sales tax.

NC Resale Certificate Renewal Agreements:

Purchases for resale are exempt from sales and use tax as they are not considered retail sales. A resale certificate or other written evidence must be used to show proof of exemption.

NC Resale Certificate Renewal Periods

There is no stated expiration period.

NC Statute of Limitations

The later of three years from: the date the return was due or the date the return was filed. There is no limitation in cases of fraud or when no return is filed.