If you’re selling digital services and products to customers in North Carolina, then you might be liable for North Carolina’ sales tax. This guide covers two very important parts of the system:
- Registering for the tax, and then
- Filing tax returns on time.
We’ve scoured the North Carolina Department of Revenue website to provide you with all the necessary information about sales tax for businesses in one place.
How to register for sales tax in North Carolina
Remote sellers register for sales tax in North Carolina according to where you are based.
US businesses can register on the NC Department of Revenue website (NCDOR) MyTax North Carolina, an online tax portal. This portal is also where you’ll file and pay your tax returns. More on that later!
International businesses must register by filling out a form and emailing it to the North Carolina tax office. You’ll find more information below.
The first step is to register for a sales tax permit! Before you get started, have the following information at hand:
- Your Social Security Number (SSN) or Federal Employer Identification Number (FEIN)
- Your business name, address, phone number.
- Partner or Responsible Person, if applicable (name, title, SSN, address)
- Details about your business (start date, type of business, etc.)
You can also see North Carolina’s Business Registration Checklist for more details.
When you’re ready, follow these steps:
- Go to the MyTax North Carolina website and click the button to start. At first you simply provide standard personal information, as well as some business details.
- Eventually you must indicate whether your sales will be Retail (B2C) or Wholesale (B2B) or both. Then you must also select between cash accounting and accrual accounting. The method you use might affect how you calculate your tax declarations.
- As a digital business, your business category will likely fall under “Other Types of Business (Unclassified Group)”.
- Estimate how much sales tax you expect to owe each month in North Carolina. This will determine the frequency at which you must file tax returns.
- Then, after a set of Yes or No questions about your business and the products you sell, you finish by providing your contact information and confirming that all info is correct.
You will either receive your tax account ID number immediately or in 10 days. Here’s what could happen:
- If the system is able to complete the registration process, a confirmation number and the issued account ID number will display on the page along with the name of your business. A notice that includes your account ID number will also be mailed to you within 5 business days.
- If the system is unable to complete the process right away, a tracking number will display on the page. Your account ID number will be issued within 10 business days and a notice that includes your account ID number will be mailed to you.
You should keep the confirmation or tracking number for your records until you receive your account ID number information by mail. These numbers will be helpful if you need to ask the Department about your application.
In summary, the registration process is pretty simple! You must fill out Form NC-BR, North Carolina Business Registration Application, then print and mail it to:
N.C. Department of Revenue
P.O. Box 25000
Raleigh, NC 27640-0100
However, the form requires a lot of information, so it’s worth looking through and gathering all the necessary documents and data ahead of time. Here’s a sneak peek:
Things to note about this form:
- Question 1 asks about a Federal Employer Identification Number (FEIN or EIN). If you aren’t familiar with this, take a moment to read about what an EIN number is and how to get one.
- Questions 8-11 ask about your business location. In #8, write N/A if you do not have a physical location (or nexus) in the state. Instead, put your international location in #11. Although the form is designed for US addresses, simply write in your full location and country in the fields provided for “State,” etc.
- Don’t forget to sign and date at the bottom!
It’s unclear exactly how long it will take to process a mail-in application, but it could take up to four weeks. Eventually you’ll receive your account ID number in the mail.
How to file sales tax returns in North Carolina
Sales and taxes should be reported and filed using US dollars. If you’ve made any transactions in North Carolina in a different currency, be sure to convert those to USD using official currency exchange rates.
When to file and pay
You must file a sales tax return either monthly or quarterly. The deadlines are as follows:
For monthly filers, reports are due on the 20th of the month following the reporting month. For example, the April sales tax report is due May 20.
For quarterly filers, reports are due on (or before!) the last day of the month following the reporting period.
- April 30, for first quarter ending March 31
- July 31, for second quarter ending June 30
- October 31, for third quarter ending September 30
- January 31, for fourth quarter ending December 31
Note: Didn’t make any sales in North Carolina during your reporting period? You should still report that. This is typically called a “zero return” and it follows the exact same process as a normal return. (Just a little less data entry 😉)
How to file
Before you get started, you should collect all the information about your taxable sales in North Carolina during the previous month or quarter. The tax website suggests having these pieces ready:
- total sales and income
- total purchases and expenses
For guidance on how to prepare these sales numbers, take a quick look at how to file a sales tax return.
You can file online in the Department’s eServices area. You can log in here using your contact information.
The Department offers this video tutorial for filling out the tax return. Once you’ve completed it, you’ll receive specific instructions on how to pay.
How to pay
Tax payments must be made using US dollars.
You can pay directly in the Department’s eServices portal at the end of the tax declaration process, when you file your return. You can enter:
- Your bank account details
- Card payment information
- ACH credit/debit transfer
What to do in between registering and filing?
Well, you must comply with all the rules for North Carolina sales tax! That means charging 4.75% sales tax and watching out for local level taxes, among other things.
For further reading that will help you stay compliant and successful as a remote seller, check out our Business Guide to Sales Tax in North Carolina.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.