North Carolina Sales Tax on Manufacturing and Machinery North Carolina: Sales Tax Handbook

North Carolina:

Are Manufacturing and Machinery subject to sales tax?

While North Carolina's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. This page describes the taxability of manufacturing and machinery in North Carolina, including machinery, raw materials and utilities & fuel. To learn more, see a full list of taxable and tax-exempt items in North Carolina.

In the state of North Carolina, the mill machinery and any mill machinery parts and accessories are considered to be exempt from the sales and use tax. However, it can be subject to the privilege tax at rate of 1% of the original sales price, with a maximum of 80 dollars for each article.

Raw Materials
In the state of North Carolina, the materials must have become an ingredient or a component of some sort of manufactured property.

Utilities & Fuel
In the state of North Carolina, the exemptions for electricity which is sold to a manufacturer are inapplicable to electricity which is used at a facility at which the primary activity is not manufacturing.

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