Use Tax

General Information

North Carolina use tax is due if you purchased, leased or rented items inside or outside this State for storage, use, or consumption in North Carolina and did not pay the applicable sales and use tax at the time of purchase.  Items subject to North Carolina use tax include tangible personal property, certain digital property and taxable services.  You must pay use tax to the Department when retailers, remote sellers, or facilitators fail to collect sales or use tax on taxable transactions.  See N.C. Gen. Stat. § 105-164.6 for additional information about consumer use tax.

Common items on which sales and use tax may not have been collected and where use tax may be due by the purchaser include, but are not limited to:

  • Tangible personal property including, but not limited to:
    • Computers and other electronic equipment;
    • Home furnishings;
    • Clothing;
    • Jewelry;
    • Sporting goods;
    • Audio compact discs (CDs), and DVDs.
    • ATVs (All Terrain Vehicles)
  • Certain digital property, which includes the following when delivered or accessed electronically:
    • A digital audio work. Examples include, but are not limited to, ringtones, digital music, readings of books or other written materials, speeches, and other sound recordings.
    • An digital audio visual work. Examples include, but are not limited to, movies, motion pictures, and musical videos.
    • A digital book.
    • A magazine, a newspaper, a newsletter, a report, or another publication.
    • A photograph.
    • A greeting card.
  • Prewritten software including electronic downloads of software.
  • Purchases of or recharges of prepaid telephone calling cards and phones.
  • Certain service contracts.
  • Admission tickets to an entertainment activity purchased outside the State where admission to the activity may be gained in the State.
  • Repair, maintenance, and installation services performed outside the State where the item is returned to the owner or owner's designee inside the State.

Calculate your use tax liability on your State individual income tax return. Please see the instructions for the applicable year in the North Carolina Individual Income Tax Instructions (Form-D401).

Filing Requirements

Additional Information