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Does North Carolina Charge Sales Tax on Services?

by Lee Breslouer May 31, 2022

The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.

Here’s what merchants need to know about taxing services in North Carolina.

Are services taxable in North Carolina?

Services in North Carolina are generally not taxable, with important exceptions:

• if the service you provide includes creating or manufacturing a product, you may have to deal with the sales tax on products 
• some counties also consider a limited number of services (such as laundry and dry cleaning) taxable
• some repair, maintenance and installation services are taxable 
• admission charges to an entertainment event

Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be taxed. For an in-depth look at sales tax in North Carolina, TaxJar’s guide to sales tax in North Carolina and the North Carolina Department of Revenue has more details.

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