Are there minimum gross sales thresholds that trigger a mandatory tax filing in North Carolina?
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Yes, North Carolina imposes a minimum gross sales threshold that triggers a mandatory sales and use tax collection and filing obligation for remote sellers. As of July 1, 2024, North Carolina repealed its transaction count threshold and now relies solely on a gross sales threshold for economic nexus purposes.
1. Threshold Details:
- A remote seller is required to collect and remit North Carolina sales and use tax if its gross sales sourced to North Carolina exceed $100,000 in either the previous or the current calendar year. This includes all sales sourced to North Carolina, regardless of whether they are taxable, exempt, or for resale, and includes sales made as a marketplace seller or through a marketplace facilitator.
- The $100,000 threshold is calculated by aggregating the sales price of all items sourced to North Carolina, including taxable sales, exempt sales, sales for resale, and marketplace-facilitated sales.
- If a remote seller exceeds this threshold in either the previous or current calendar year, it is considered "engaged in business" in North Carolina and must register, collect, and remit sales and use tax, and file returns accordingly.
- If a remote seller does not exceed the $100,000 threshold and does not otherwise have a physical presence or other legal requirement to collect North Carolina sales and use tax, it is not required to register, collect, or file sales and use tax returns in North Carolina.
- For remote sellers who previously registered solely due to the now-repealed transaction threshold, they may cancel their registration if they did not exceed $100,000 in gross sales in the previous year or in the current year up to the date of cancellation, and are not otherwise engaged in business in North Carolina. They must continue to collect and remit tax until the registration is formally cancelled.
2. Other Filing Requirements:
- Retailers with a physical presence in North Carolina, or who otherwise meet the definition of "engaged in business" under North Carolina law, must collect and remit sales and use tax regardless of the gross sales threshold.
- For individual income tax, North Carolina’s minimum gross income filing requirements differ from federal requirements, but this is separate from the sales and use tax gross sales threshold.
Summary: The minimum gross sales threshold that triggers a mandatory sales and use tax filing for remote sellers in North Carolina is $100,000 in gross sales sourced to the state in either the previous or current calendar year. There is no longer a transaction count threshold. Sellers below this threshold, with no other nexus, are not required to register or file for sales and use tax in North Carolina.
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