Transportation Commerce Tax FAQs

The transportation commerce tax is an excise tax imposed on the gross receipts derived from for‑hire ground transport service if the passenger boards the vehicle in North Carolina and regardless of whether the service is completed. The tax is intended to be passed on to and borne by the purchaser of the for‑hire ground transport service. The for‑hire ground transport service provider, and not the vehicle driver, must collect the tax due.

The transportation commerce tax is in addition to any fees or charges by the Department of Motor Vehicles (“DMV”).

A for-hire ground transport service provider must register to collect and remit the tax. This includes taxi services regulated under G.S. § 160A-304 and a transportation network company as defined in G.S. § 20-280.1.

You must register before July 1, 2025, or before you engage in business in the state as a for-hire ground transport service provider, whichever is later.  

You may register online using the electronic Form NC-TCR. A paper version of Form NC-TCR is also available.

A transportation network company as defined in G.S. § 20-280.1 or a taxi service regulated under G.S. § 160A-304.

A transportation network company is any person that uses an online‑enabled application or platform to connect passengers with TNC drivers who provide prearranged transportation services. State law requires a transportation network company to hold a permit issued by the North Carolina Department of Motor Vehicles.  

In many cases, you may call a transportation network company a ride-share company or something similar.

Note: A TNC driver is an individual that uses a passenger vehicle in connection with a transportation network company's online‑enabled application or platform to connect with passengers in exchange for payment of a fee to the transportation network company.

A company that provides a cell-phone application that allows a person to request a ride from an individual operating a passenger vehicle for a fee.

A shared-ride service is a for‑hire ground transport service for which an individual has been matched with another individual by a for‑hire ground transport service provider.

Important: This definition requires the for-hire ground transport service provider to match the individual riders. It does not apply to individual riders that coordinate with each other to occupy the same vehicle.

A transportation network company connects a passenger with another passenger along the planned route. The two separate riders are in the vehicle together for a portion of the ride and pay two separate fares. 

A for‑hire ground transport service requested by a passenger who requests exclusive use of the vehicle.  

Important: This includes a group of people who arrange among themselves to share the use of the vehicle. 

A group of friends request a ride from a transportation network company and are matched with a driver. The friends ride to one or more destinations without being matched with other passengers by the transportation network company.

A for-hire ground transport service provider is responsible for collecting and remitting the tax.

No. The transportation network company is responsible for registering and remitting the tax to the Department. 

It depends on the type of service provided.

The tax is due on all gross receipts derived from each for-hire ground transportation service if the passenger boards the vehicle in North Carolina.  This includes the following receipts:

• Trip fare
• Booking fees
• Surcharges
• Fuel charges
• Fees for using a credit card
• Cleaning fees
• Wait time fees
• Fees for toll expenses of the service provider
• Fees for rides to the airport
• Any other fees or charges for the service

If a tip meets the following requirements, it is not part of the gross receipts subject to the tax:

• The tip is voluntary;
• The entire amount of the tip is provided to the driver; and
• The for-hire ground transportation service provider keeps records that separately account for tips and the distribution of tips to drivers.

Yes. The tax applies to a ride if a passenger boards the vehicle in North Carolina.

No. The tax applies to a ride if a passenger boards the vehicle in North Carolina.

There are only two exemptions from the tax.

• Certain Public Transportation Rides - For-hire ground transport service provided by a for-hire ground transport service provider as public transportation on behalf of a state agency, a governmental entity listed in G.S. § 105-164.14(c), or a local board of education.
• Sales the state cannot constitutionally tax.

The easiest way to file returns and make payments is online.  The online filing and payment application will be available on the Department’s website before your first return is due.  Monthly with prepayment filers are required to file their returns electronically. 

It depends on your filing frequency.  

• Monthly or Monthly with Prepayment Filing Frequency - Your return and payment(s) is due on the 20th day of the month following the end of the month. For example, your return and payment(s) for July 2025 is due on or before August 20th, 2025.
• Quarterly Filing Frequency - Quarterly returns are due on or before the last day of January, April, July, and October for the preceding three-month period. For example, your return for the third quarter of 2025 (July – September) is due on or before October 31st, 2025.

Yes. You must file a return for every tax period even if you do not have any sales.

The return is considered timely filed if you file on the business day following the Saturday, Sunday, or a legal holiday. Refer to Directive TA-18-1 for further details about timely filing of returns and payments.

The Secretary of Revenue assigns your filing frequency based on your tax liability.  Your filing frequency will be reviewed every year to determine whether it needs to be changed.

• If your tax liability is consistently more than $100 but less than $20,000 per month, you should file a return monthly and pay taxes on or before the 20th day of each month for all taxes due for the preceding calendar month.
• If your tax liability is consistently less than $100 per month, you should file a return quarterly and pay taxes due on or before the last day of the month for all taxes due for the preceding calendar quarter.
• If your tax liability is at least $20,000 a month, you should file a return monthly and pay taxes on or before the 20th day of each month for all taxes due for the preceding calendar month and include a prepayment for the next month’s tax liability. Monthly with prepayment returns are required to be filed online.
• For additional information refer to the Filing Frequency and Due Dates web page.

Complete and submit the Form NC-BN, Out-of-Business Notification. You can complete the form online.

Complete and submit Form NC-AC, Business Address Correction.  You can complete the form online. 

Yes. If tax is due, both a failure to file penalty of 5% per month or fraction thereof with a maximum of 25% and a failure to pay penalty of 5% will be due. Interest is due on the amount of tax due from the date the tax was due until it is paid.

A for-hire ground transportation service provider must keep records that establish their tax liability. If a for-hire ground transportation provider does not keep records that establish their tax liability, all gross receipts of the for-hire ground transportation provider are subject to tax. The recordkeeping period for tax purposes may differ from those of the DMV or other authorities.