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.)
When you’re ready, follow these steps: 1. 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. 2. 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.
3. As a digital business, your business category will likely fall under “Other Types of Business (Unclassified Group)”.
4. 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.
5. 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.
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:
Monthly 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.
Quarterly 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:
* 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.