Frequently Asked Questions - Remote Sales
General Remote Sales
A sale of an item ordered by mail, telephone, internet, mobile phone application, or another method by a retailer who receives the order in another state and delivers the item or makes it accessible to a person in this state or causes the item to be delivered or made accessible to a person in this state or performs a service sourced to this state. It is presumed that a resident of this state who makes an order was in this state at the time the order was made. N.C. Gen. Stat. § 105-164.3.
A seller that does not have a physical presence in North Carolina and does not have any other legal requirement to register in North Carolina for sales and use tax purposes, but sells items sourced to North Carolina.
It depends. The seller must collect sales and use tax if it has gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina in the previous or current calendar year (“Threshold”), including sales as a marketplace seller and marketplace-facilitated sales. These sellers are engaged in business in North Carolina for sales and use tax purposes. In addition, a retailer with a physical presence in the state or other legal requirement to collect tax must collect the tax on remote sales.
Marketplace facilitators and marketplace sellers should refer to the Marketplace Facilitator and Marketplace Seller webpage for details regarding their sales and use tax obligations.
If a seller does not collect North Carolina, local, or transit rates of sales and use tax, you should review your consumer use tax obligations.
Remote Sellers
Yes. Remote sellers that have gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina in the previous or current calendar year (“Threshold”), including sales as a marketplace seller and marketplace-facilitated sales, are engaged in business in North Carolina for sales and use tax purposes.
Remote sellers that do not meet the Threshold are not engaged in business in North Carolina for sales and use tax purposes. The exception for small remote sellers does not apply to sellers with a physical presence in North Carolina or to sellers with any other legal requirement to collect and remit sales and use tax in North Carolina.
Both. A remote seller is engaged in business in the state if its gross sales exceed the threshold in either the current or previous calendar year.
The sales price of all sales of items sourced to North Carolina are added together to determine whether the remote seller meets or exceeds the Threshold. This includes taxable sales, sales for resale, exempt sales, nontaxable sales, and marketplace-facilitated sales.
Example –
Company A has the following sales sourced to North Carolina for the calendar year:
- $220,000 in sales to wholesalers providing certificates of exemption for sales for resale.
- $75,000 in sales to purchasers providing certificates of exemption for purposes other than resale (use in manufacturing, sales to exempt entities).
- $10,000 in sales that qualify for an exemption from sales and use tax.
- $95,000 in taxable sales to purchasers.
Company A has gross sales of $400,000 sourced to North Carolina. Company A is engaged in business in North Carolina because its gross sales sourced to North Carolina exceed $100,000.
The dollar amount of sales for all the channels are combined in determining if the seller is engaged in business in North Carolina.
Example –
- Seller ABC offers its items for sale on Marketplace XYZ, on Seller ABC’s website, and at Seller ABC’s brick and mortar store.
- Seller ABC’s sales on Marketplace XYZ are $120,000 sourced to North Carolina, $95,000 sourced to State B, and $25,000 sourced to State C.
- Seller ABC’s sales from its own website are $75,000 sourced to North Carolina, $20,000 sourced to State B, and $80,000 sourced to State C.
- Seller ABC’s sales from its brick and mortar location in State D are $30,000.
Seller ABC had $120,000 in sales sourced to North Carolina on Marketplace XYZ and $75,000 in sales sourced to North Carolina from its website. As a result, Seller ABC had gross sales of $195,000 sourced to North Carolina. Seller ABC is engaged in business in North Carolina because its gross sales sourced to North Carolina exceed $100,000.
Marketplace XYZ would include the $120,000 in sales sourced to North Carolina in its own computation to determine if it has met or exceeded the Threshold. Marketplace XYC is engaged in business in North Carolina because its gross sales sourced to North Carolina exceed $100,000.
Marketplace facilitators and marketplace sellers should refer to the Marketplace Facilitator and Marketplace Seller webpage for additional information.
Yes. “Engaged in business” includes “occupying or using permanently or temporarily . . . any . . . place of business in this state, or permanently or temporarily . . . having any representative, agent, sales representative . . . or solicitor operating or transacting business by mobile phone application or other application in this state.” N.C. Gen. Stat. § 105-164.3. Attendance by a seller at a single event or function in North Carolina for the purpose of making sales at retail establishes physical presence for the seller. The exception for small remote sellers does not apply to sellers with a physical presence in North Carolina or another legal requirement to collect and remit sales and use tax in North Carolina.
Generally, yes. A non-U.S. company that exceeds the Threshold must collect North Carolina sales and use tax.
Note: A non-U.S. company must also collect tax if it has a physical presence in North Carolina or any other legal requirement to collect and remit sales and use tax in North Carolina.
Remote sellers can register directly with the Department or through the Streamlined Sales Tax® Governing Board, Inc. There is no fee to apply for a certificate of registration in North Carolina. General questions about business registrations may be directed to 1-877-252-3052.
North Carolina is a member of the Streamlined Sales Tax® Governing Board, Inc. (“Streamlined Sales Tax®"). Remote sellers can register with all 24 Streamlined Sales Tax® states (AR, GA, IN, IA, KS, KY, MI, MN, NE, NV, NJ, NC, ND, OH, OK, RI, SD, TN, UT, VT, WA, WV, WI, and WY) by completing one online application through the Streamlined Sales Tax® Registration System. There is no fee to complete and submit the Streamlined Sales Tax® online registration form.
Remote sellers can also register directly with North Carolina using the Department’s online business registration portal or by submitting a completed Form NC-BR, Business Registration Application for Income Tax Withholding, Sales and Use Tax, and Other Tax and Service Charge.
Yes.
North Carolina Businesses
It does not directly impact you. Retailers with a physical presence in North Carolina must collect North Carolina sales and use tax.
It depends. Each state’s tax laws are different. You should contact or review each state's requirements to determine if you are required to collect and remit sales and use tax for the other states.