What Services Are Exempt From Sales Tax In North Carolina

What purchases are exempt from the North Carolina sales tax?

While the Northward Carolina sales revenue enhancement of 4.75% applies to nigh transactions, in that location are certain items that may be exempt from taxation. This page discusses diverse sales tax exemptions in North Carolina.

Sales Tax Exemptions in N Carolina

In North Carolina, sure items may exist exempt from the sales tax to all consumers, not just tax-exempt purchasers.

Several examples of exemptions to the country sales tax are prescription medications, some types of groceries, some medical devices, and machinery and chemicals which are used in enquiry and development.

Many states take special, lowered sales tax rates for certain types of staple goods - such equally groceries, clothing and medicines. Restaurant meals may too have a special sales tax rate. Here are the special category rates for N Carolina:

Clothing

4.75%

Groceries

ii%

Prepared Food

Prescription Drugs

EXEMPT

OTC Drugs

iv.75%

These categories may have some further qualifications before the special charge per unit applies, such every bit a price cap on vesture items. Groceries are more often than not divers as "unprepared nutrient", while pre-prepared food may be subject to the restaurant food taxation rate.

Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the land considers them to exist a "grocery":

Is candy taxable in North Carolina? Candy is Non considered a grocery in Due north Carolina

Is soda taxable in North Carolina? Soda is NOT considered a grocery in Northward Carolina

Are services, aircraft, installation, etc taxable in N Carolina?

The taxability of transactions involving services, aircraft, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are field of study to the Due north Carolina sales tax see the N Carolina sales taxability FAQ page.

Other tax-exempt items in North Carolina

This table lists a number of additional categories of goods and services that are exempt from North Carolina's sales tax. For a list that also shows taxable items, see the listing of taxable and nontaxable items in North Carolina.

Category	Exemption Status
Food and Meals
Grocery Food	EXEMPT *
Leases and Rentals
Motor Vehicles	EXEMPT *
Manufacturing and Machinery
Raw Materials	EXEMPT *
Utilities & Fuel	EXEMPT *
Medical Appurtenances and Services
Medical Devices	EXEMPT *
Medical Services	EXEMPT
Occasional Sales
Full general Occasional Sales	EXEMPT
Motor Vehicles	EXEMPT *
Optional Maintenance Contracts
Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts	EXEMPT *
Services
Janitorial Services	EXEMPT
Transportation Services	EXEMPT
Software and Digital Products
Custom Software - Delivered on Tangible Media	EXEMPT
Custom Software - Downloaded	EXEMPT