How to Register for a Sales Tax Permit in North Carolina

For years you have been working as an employee, learning and perfecting your skills no matter what position within the company’s structure you occupied. You followed the market trends, learned how to analyze the market dynamics and you have already set your sights on a few potential projects that could lead to you becoming your own boss. Ever since you started working, your goal was to hone your skills over time in order to equip yourself with a skills toolkit that would enable you to run a successful business on your own.

You have looked into options and plan on running a small business in the state of North Carolina. Over your days as an employee you have learned how to run a business that has already been established, but you have not had the chance to go through the process of starting a business. You are unsure where to go, what forms you need to fill and submit, what permits are needed for your business and whether you should pay tax.

While there are a number of shapes your business can take, it is essential you remain within the regulatory framework of the state.

Registering a New Business in North Carolina

Starting a business in North Carolina involves completing a series of legal steps. The North Carolina Government’s website is the ideal place to find the necessary information regarding all the requirements when it comes to starting a business in the state. However, this guide provides a shorter and simplified version that will guide you in the right direction.

The first step to take when registering a business in North Carolina is to choose a business name. You can make sure your desired business name is available online. The process of registering a business name as well as the business legal form is done through the Secretary of State office. Types of business structures range from sole proprietorship to a corporation, as in the majority of the United States. Your business structure will affect taxation as well as legal and financial liability.

The next step is to acquire all the relevant licenses. The State of North Carolina issues business licenses on a state, city, county and/or federal level, meaning there is not a single license that covers all. Depending on the business you want to run, you will have to apply for an appropriate license. Some businesses could be subject to a number of state requirements while others won’t.

The State of North Carolina has over 700 regulatory licenses and permits, so if you need further help and consulting, call at (800) 228-8443.

Once all the licenses and permits have been sorted you will have to obtain all the necessary tax information. It is advisable to consult with an accountant or an attorney in regards to the taxation process.

The registration can be done electronically through the North Carolina Secretary of State as noted above. Once you file all the documents, you will be updated on the status of your application via e-mail. However, it usually takes five to seven business days from the date of filing before the e-mail is received.

North Carolina Sales Tax Permits

Depending on the business, you might be obligated to file taxes. Before registering with the North Carolina Department of Revenue you should determine if you are obligated to pay tax and whether the business you are running is taxable.

In general, in order for a business to be obliged to pay tax, it has to have an office or a place of business within the state, or employees and other representatives. In addition, if you have a place of distribution like a storage space you have something called a sales tax nexus, meaning you have to apply for a sales tax permit.

If your business is selling merchandise, you should determine whether the goods you sell are taxable. In general, the state of North Carolina does not require services to be taxed while selling tangible products is subject to tax.

If you have established that your business is subject to sales tax, you can do the process in two ways, either electronically or by mail. To file via mail you will have to submit the North Carolina Business Registration Application to the Department of Revenue. You are required to provide a social security number (SSN) or a Federal Employer Identification Number (FEIN) as well as North Carolina Secretary of State Number.

North Carolina’s Department of Revenue provides a full checklist for you to follow when registering a business and tax permits. The registration process is quick and free of charge and you should receive your sales tax permit within five business days while it could take up to ten business days if you file by mail.

Sales Tax Exemptions in North Carolina

The state of North Carolina provides you with the opportunity to avoid paying taxes in case you are purchasing products with the intention to sell them on. In order to buy tax free products you will have to present a North Carolina Sales and Use Tax Agreement Certificate of Exemption to the seller. The certificate can be printed out after you have completed your sales tax permit registration.

In order for your certificate of exemption to be valid, you have to fill in all the required data and sign the form E-595E before submitting it to the buyer.

If you are the seller and you are presented with a resale certificate, make sure the document is filled out properly before accepting it. You can also check the validity of the submitted North Carolina Sales and Use Tax Agreement Certificate of Exemption by filling in the required data at the Department of Revenue’s Registry of Sales and Use/Mill Machinery Privilege Tax Numbers.

The website does state that the “database may not contain taxpayers who registered with the Department but are not required to file sales and use tax returns,” and that if you are unable to confirm the validity of the resale certificate online, you should call the Taxpayer Assistance Center at 1-877-252-3052.

While this guide is a shortened version of the steps required to register your business and a sales tax permit in the state of North Carolina, we urge you to check with your city/county offices regarding more information or any special licenses and permits you might be required to file for.

Contact Details

North Carolina Department of the Secretary of State

Business Registration division

2 South Salisbury Street
Raleigh, NC 27601-2903

Telephone: 919-814-5400
Fax: 919-807-2063

North Carolina Department of Revenue

501 N Wilmington St
Raleigh, NC 27604

Other office locations

Direct Liquidation is a goTRG company.

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