North Carolina: Sales Tax Handbook
What constitutes sales tax nexus in North Carolina?
One of the more complicated aspects of North Carolina sales tax law is sales tax nexus, the determination of whether a particular sale took place within the taxation jurisdiction of North Carolina, and is thus subject to state (and possibly local) sales taxes.
If a vendor's transactions are determined to have nexus in North Carolina, the vendor must register for a North Carolina sales tax license and collect appropriate sales taxes from the buyer for all transactions with nexus in the state. On this page, we have compiled some of the most commonly needed facts about what constitutes sales tax nexus in North Carolina.
Sales Tax Nexus in North Carolina
According to the law of North Carolina, all retailers who have tax nexus are "engaged in business", and can be defined in several different ways.
If your business has an office or any other place of business in North Carolina, "any place of destribution"(maintained, used, or occupied directly, idirectly, perminantly, or temporarily), or any employee, agent, independant contractor, or any other representitive within the state's boundaries, you have tax nexus in North Carolina.
For additional details on sales tax nexus law in North Carolina, see the nexus information page from the Department of Revenue at http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_105/Article_5.html
Taxation of Internet-Based Sales in North Carolina
NOTE: 2018 Supreme Court Ruling Regarding Online Sales Taxes
In the 2018 Supreme Court case South Dakota vs. Wayfair Inc, Et Al., the court overturned a previous ruling that required a merchant to have physical nexus in order for a state to collect sales tax. This means that any state is now free to enforce collection of sales taxes on out-of-state online merchants. The information provided here may be subject to change, and many states are expected to begin collecting online sales taxes following this ruling.
Depending on the situation, North Carolina may or may not charge sales tax on Internet-based transactions. The state of North Carolina does enforce click through nexus. This would be applicable in a situation where any retailer who is presumed to be transacting or soliciting business through any sort of representitive (only if the retailer has enters into an agreement with any resident of North Carolina who, as per the agreement and for any sort of paymrnt, either indirectly or directly refers potential customers to the seller AND these referrals result in gross receipts of more than of ten thousand dollars during the previous year).
The nexus status and taxability of Internet-based sales, by vendors and/or consumers within North Carolina, have been the subject of hot debate in recent years. You can learn more on our introduction to Internet-based sales taxes.
Does my business have tax nexus in North Carolina?
The folks at the sales tax compliance company Avalara are an approved North Carolina sales tax partner, and you can use their free North Carolina nexus wizard tool to determine whether or not your business has nexus, and is therefore required to pay North Carolina sales taxes. If you're interested in automating your sales tax collection and filing process, click here to get more information.
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