Remote Sales Frequently Asked Questions

All remote sellers having gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina or two hundred (200) or more separate transactions sourced to North Carolina in the previous or current calendar year (collectively "Threshold") must register to collect and remit sales and use tax to North Carolina effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later.  Remote sellers may voluntarily begin collecting and remitting sales and use tax any time prior to November 1, 2018.

Note:  The small seller exception does not apply to sellers with a physical presence in North Carolina or any other legal requirement to collect and remit sales and use tax in North Carolina.

General Remote Sales FAQs

General Remote Sales FAQs

What is a remote sale?

A "remote sale" is defined as "[a] sale of tangible personal property or digital property ordered by mail, by telephone, via the Internet, or by another similar method, to a purchaser who is in this State at the time the order is remitted, from a retailer who receives the order in another state and delivers the property or causes it to be delivered to a person in this State.  It is presumed that a resident of this State who remits an order was in this State at the time the order was remitted."  N.C. Gen. Stat. § 105-164.3. 

Who is a remote seller?

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 products for delivery into North Carolina, is a remote seller subject to the requirements of N.C. Gen. Stat. § 105-164.8(b).

Is this a new tax?

No.  Existing State law, N.C. Gen. Stat. § 105-164.8(b), requires a retailer making remote sales sourced to North Carolina to register, collect, and remit sales and use tax on the remote sales.  If sales and use tax is not collected by the seller, the purchaser is required to track and annually self-report use tax from mail order and online retailers. This consumer use tax was enacted in 1939.

Are remote sellers required to collect sales and use tax on sales made via the Internet?

Effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later, a remote seller is required to collect and remit tax on all taxable remote sales sourced to North Carolina, including sales made online.  The Internet Tax Freedom Act prohibits North Carolina from imposing a sales tax on Internet access services, but does not prohibit North Carolina from taxing sales made via the Internet.

What if no tax is charged on my purchases from a remote seller?

If North Carolina sales and use tax is not collected by a seller, N.C. Gen. Stat. § 105-164.6 requires the purchaser to report and remit use tax on its taxable purchases for storage, use, or consumption in North Carolina.  A business must report and remit use tax on its taxable purchases on its sales and use tax returns. An individual is required to annually report and remit use tax on the consumer use tax line of the individual’s income tax return or, if the individual is not required to file an individual income tax return, on Form E-554, Consumer Use Tax Return.  A remote seller that meets the Threshold remains liable for collecting and remitting sales and use tax on sales into North Carolina.

Remote Seller FAQs

Remote Seller FAQs

What is a remote sale?

A "remote sale" is defined as "[a] sale of tangible personal property or digital property ordered by mail, by telephone, via the Internet, or by another similar method, to a purchaser who is in this State at the time the order is remitted, from a retailer who receives the order in another state and delivers the property or causes it to be delivered to a person in this State.  It is presumed that a resident of this State who remits an order was in this State at the time the order was remitted."  N.C. Gen. Stat. § 105-164.3.

Who is a remote seller?

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 products for delivery into North Carolina, is a remote seller subject to the requirements of N.C. Gen. Stat. § 105-164.8(b).

Are there protections for small remote sellers?

An exception exists for small remote sellers as provided in Directive SD-18-6. Only remote sellers having gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina or two hundred (200) or more separate transactions sourced to North Carolina in the previous or current calendar year (collectively "Threshold") must register, collect, and remit sales and use tax to North Carolina effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later.  The small seller exception does not apply to sellers with a physical presence in North Carolina or any other legal requirement to collect and remit sales and use tax in North Carolina.

Is the Threshold computed on the previous calendar year’s sales, current calendar year’s sales, or both?

Both.

Example 1:

A remote seller that reached the Threshold in calendar year 2017 is required to collect and remit the applicable tax on sales sourced to North Carolina beginning November 1, 2018.

Example 2:

A remote seller that did not reach the Threshold in 2017 but does reach the Threshold prior to September 2, 2018, is required to collect and remit the applicable tax on sales sourced to North Carolina beginning November 1, 2018.

Example 3:

A remote seller that reaches the Threshold on or after September 2, 2018 but did not meet the Threshold in 2017, is required to collect applicable tax on sales sourced to North Carolina beginning 60 days after the seller meets the Threshold.

If a seller is below the Threshold, but attends a single event or function in this State for the purpose of making sales at retail, is the seller required to collect and remit North Carolina sales and use tax?

Yes.  "Engaged in business" is defined, in part, as "occupying or using permanently or temporarily . . . any . . . place of business for selling or delivering tangible personal property, digital property, or a service for storage, use, or consumption in this State."  N.C. Gen. Stat. § 105-164.3.  Attendance by a seller at a single event or function in North Carolina 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. See Specialty Markets or Other Events for additional information.

Are remote sellers, who were not collecting and remitting North Carolina sales tax prior to the Wayfair decision, liable for sales and use tax on sales sourced to North Carolina prior to November 1, 2018?

No.  The Department will enforce the North Carolina remote sales statute on a prospective basis.  This prospective treatment does not apply if a person has a physical presence or another legal obligation to collect and remit North Carolina sales and use tax.

Are remote sellers required to collect sales tax on sales made via the Internet?

Effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later, a remote seller is required to collect and remit tax on all taxable remote sales sourced to North Carolina, including sales made online.  The Internet Tax Freedom Act prohibits North Carolina from imposing a sales tax on Internet access services, but does not prohibit North Carolina from taxing sales made via the Internet.

Is a non-U.S. company that makes remote sales sourced to North Carolina required to collect North Carolina sales and use tax?

Yes.  A remote seller having gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina or two hundred (200) or more separate transactions sourced to North Carolina in the previous or current calendar year is required to collect and remit North Carolina sales and use tax effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later.

How do remote sellers register for North Carolina sales and use tax?

North Carolina is a member of the Streamlined Sales and Use Tax Governing Board, Inc. ("SSTGB"). Remote sellers can register with all 24 Streamlined member 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 this online registration form, available at www.sstregister.org.

Remote sellers can also register directly with North Carolina by 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. 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.

How often are remote sellers required to file sales and use tax returns?

Retailers are required to file sales and use tax returns on a quarterly, monthly, or monthly with prepayment basis depending on the retailer’s total monthly sales and use tax liability.  More detailed information regarding the Department’s file and pay options are available at www.ncdor.gov/taxes-forms/sales-and-use-tax/filing-requirements.

If a remote seller registers through the Streamlined Sales Tax Registration System and contracts with a Certified Service Provider (CSP) to perform its sales and use tax functions, the CSP may file monthly sales and use tax returns on behalf of the remote seller.

How are remote sellers that are already registered to collect and remit North Carolina sales and use tax affected by the Wayfair decision?

Retailers and remote sellers that are currently collecting and remitting North Carolina sales and use tax should continue to do so.

North Carolina Business and Individual FAQs

North Carolina Business and Individual FAQs

I am a business located in North Carolina currently collecting and remitting North Carolina sales and use tax. How does this ruling affect my requirements to collect and remit sales and use tax in North Carolina?

The ruling does not have an effect on the North Carolina obligations of retailers with a physical presence in North Carolina or any other legal requirement to collect and remit sales and use tax in North Carolina.  Retailers that are already collecting and remitting North Carolina sales and use tax should continue to do so.

I am a business located in North Carolina that sells products for delivery into other states. Am I required to collect and remit sales and use tax for other states?

Each state’s tax laws are different.  A North Carolina retailer that sells products for delivery into another state may be required to collect and remit that state’s sales tax to that state.  You should contact each state to determine that state’s requirements for registering, collecting, and remitting sales tax in that state. To obtain state website and contact information for other states, visit www.streamlinedsalestax.org/index.php?page=State-Websites.

Are remote sellers required to collect sales tax on sales made via the Internet?

Effective November 1, 2018 or 60 days after a remote seller meets the Threshold, whichever is later, a remote seller is required to collect and remit tax on all taxable remote sales sourced to North Carolina, including sales made online.  The Internet Tax Freedom Act prohibits North Carolina from imposing a sales tax on Internet access services, but does not prohibit North Carolina from taxing sales made via the Internet.

What is the effect of the Wayfair decision on North Carolina purchasers?

Remote sellers who meet the Threshold are required to collect and remit North Carolina sales and use tax on remote sales sourced to North Carolina.  However, North Carolina purchasers are required to pay North Carolina use tax on tangible personal property purchased, leased, or rented inside or outside this State for storage, use, or consumption in North Carolina, as well as digital property and services sourced to North Carolina, if North Carolina sales and use tax was not collected by the seller.

Will North Carolina’s remote sales statute have any impact on assessments issued prior to November 1, 2018?

No.  The Department will enforce the North Carolina remote sales statute on a prospective basis.

Associated Files