The state of North Carolina imposes a sales tax on transactions for the purchase of most products and services. However, like most states, North Carolina gives certain sales tax exemptions to specified business entities and transactions (such as buying wholesale to sell retail). To get one of these North Carolina tax exemptions for sales tax, a business should first register for a sales tax license. After getting authorized to collect sales tax, the business can then use special North Carolina tax exempt forms to get exemptions on North Carolina sales tax.
Form a business first if it requires filing with the North Carolina Secretary of State. A corporation, limited liability company, limited liability partnership and limited partnership must file at the state level. By filing the business entity first, you can keep all North Carolina sales tax and tax exemption records straight by using the business name for all filings and tax exemptions.
Get a federal tax identification number if you need one. At the federal level, the Internal Revenue Service issues a federal employer identification number (EIN). You typically need an EIN if you have employees or the business is a nonprofit (even if it has no wage-earning employees). You can look up all relevant EIN information on the IRS.gov website by searching for “EIN registration” at the top of the page.
File as a North Carolina business to get a sales tax permit number (tax ID number). Go to the “Sales and Use Tax Forms and Certificates” page on the North Carolina Department of Revenue website at dornc.com/downloads/sales.html. You will see a link to the online and printable form for a “Business Registration Application,” which includes, among other things, registration for North Carolina sales tax. By registering, you will then have the proper tax ID number to get North Carolina tax exemptions on certain sales tax.
Determine which of your transactions, if any, qualify for a sales tax exemption in N.C. While it is best to consult with a North Carolina business attorney, the Department of Revenue does provide some information. Go to the “Entities Exempt From Tax” page at dornc.com/taxes/sales/entities.html and read through that section to determine which North Carolina sales tax exemptions apply to your business or its purchases. For example, certain nonprofit organization may have a full exemption.
After determining that you do qualify for a North Carolina exemption, you need to access the North Carolina tax exempt forms. Some entities need an exemption number. Others simply need to use a “Streamlined Sales and Use Tax Agreement Certificate of Exemption” at http://www.dornc.com/downloads/fillin/E595E_webfill.pdf when making a sales-tax-exempt purchase. Note that this is commonly called a North Carolina resale certificate but may also permit certain other North Carolina tax exemptions. You can access these forms on the forms page linked to above. The North Carolina tax exemption forms are found near the bottom of the list.
North Carolina Sales Tax Forms