Step-by-step process to file sales and use tax in North Carolina
Let’s get right into the steps for filing sales and use tax in North Carolina:
Step 1: Visit the NCDOR Website
To begin the process of filing your sales and use tax return, you will need to visit the official website of the North Carolina Department of Revenue. Open your web browser and navigate to ncdor.gov.
Once the website loads, click on the "Taxes and Forms" option and locate the "Sales and Use Tax" option.
On the right side of the page, you should see an option that says "File and Pay E-500." Click on this link to access the online filing system for sales and use tax returns.
Step 2: Enter Contact Information
After clicking on the "File and Pay E-500" link, you will be directed to the Online File and Pay page. This is where you will begin the process of filing your sales and use tax return.
The first step is to enter your contact information. Start by entering your contact name in the designated field. This should be the name of the person who is filing the return on behalf of the business or taxpayer.
Next, enter the contact email address where you would like to receive your sales and use return confirmation. It's important to use a valid email address that you have access to, as this is where the confirmation will be sent.
For the last field, enter a working phone number where you can be reached if there are any questions or concerns regarding your account. Once you have entered all the required contact information, click on the "Next" button to proceed to the next step
Step 3: Enter Account ID
Now, you need to provide your account ID. This is the unique 9-digit number you received when completing the business registration form with the department. In most cases, your account ID will start with the number 6.
Carefully enter your account ID in the designated field, double-checking for accuracy. If you don't have your account ID, contact the department for assistance. Once you have entered it, click the "Submit" button to proceed.
After entering your account ID, click "Submit."
Step 4: Verify Business and Account Information
After submitting your account ID, the system will display your business and account information. Take a moment to review the details, including your business name, address, and any other relevant information.
If everything looks good, click "Next." You may need to input your sales account ID again if your business name is not listed.
Step 5: Select Filing Option
Next, you need to choose the appropriate filing option based on your situation. There are several options available, so you need to select the one that applies to your business. If you need to file and pay your business's sales and use tax liability, select the first option. This is the most common scenario for businesses that have collected sales tax and need to remit it to the state.
If you have no receipts to report or only have non-taxable receipts, you can choose the third option to submit a zero-tax return. This option is suitable for businesses that did not have any taxable sales during the reporting period.
In rare cases, the department may contact you and instruct you to submit payment only. If this applies to you, select the fourth option. Once you choose the appropriate filing option, click the "Next" button to proceed.
Step 6: Enter Period Ending Date and Identification
Input the period ending date for the return you are filing. The online filing system is set up to use period ending dates that correspond with the filing status you selected when registering your business with the department.
Monthly filers will have 12 possible period ending dates, while quarterly filers will have four. After selecting the period ending date, enter your Social Security Number or FEIN and click "Next."
Step 7: Complete Sales and Use Tax Liability Lines
Fill in the applicable lines for your sales and use tax liability. Use tax is reported under the "Purchases for Use" column, while sales tax is reported under the "Receipts" column.
The current sales tax rate in Wake County is 7.25%, which is divided into a 4.75% general state rate, a 2% county rate, and a 0.5% transit tax.
On Line 4, enter the receipts subject to the general state rate and the gross amount of sales made.
Your total sales tax liability will be auto-calculated. Click "Next" to continue.
Step 8: Allocate County Tax
Enter the amount of county tax owed to each county in the applicable column.
Ensure that the information entered matches Form E-500 to avoid errors. Click "Next" to proceed to the payment selection screen.
Step 9: Select Payment Method
Choose your preferred payment method: credit card or bank draft. Visa and Mastercard are accepted for credit card transactions, and there is a $2 convenience fee for every $100 increment of tax.
There is no fee for bank draft payments, but you will need a bank routing number, account number, and account type to complete the transaction.
Check with your bank to confirm if savings and money market accounts can be automatically drafted. Enter the required information and click "Submit."
Step 10: Verify Information and Receive Confirmation
After submitting your payment information, verify that all the details you entered are correct. Once everything is confirmed, click "Submit."
You will see a confirmation number displayed on the screen, which you should keep for your records. Within two business days, you will receive an email confirmation sent to the email address you provided at the beginning of the process.
North Carolina sales tax rates & calculations in 2026
The North Carolina sales tax rate in 2026 is 4.75% to 7.5%. This comprises a base rate of 4.75% plus a mandatory local rate of up to 2.25%. Depending on the local sales tax jurisdiction, the total tax rate can be as high as 7.5%.
Filding Sales Tax in North Carolina FAQs
What is the deadline for filing sales and use tax returns in North Carolina?
The filing deadline depends on your filing frequency. Monthly filers must file and pay by the 20th day of the month following the reporting period, and quarterly filers must file and pay by the last day of the month following the end of the quarter. If the due date falls on a weekend or holiday, the return and payment are due on the next business day.
What happens if I file my sales and use tax return late?
If you file your return late, you may be subject to penalties and interest. The NCDOR imposes a failure to file a penalty of 5% of the tax due for each month or part of a month the return is late, up to a maximum of 25%. Additionally, interest accrues on any unpaid tax from the due date until the tax is paid.
Can I amend a sales and use tax return if I made a mistake?
Yes, if you discover an error on a previously filed return, you can amend it. To amend a return, log in to your online account, locate the return you need to amend and follow the instructions provided by the NCDOR. Be sure to provide an explanation for the changes and pay any additional tax due, if applicable.
What should I do if I can't pay the full amount of sales and use tax owed?
If you are unable to pay the full amount of tax owed, it's important to still file your return on time to avoid penalties. Contact the NCDOR to discuss payment options, such as setting up an installment agreement or requesting a short-term extension. Remember that interest will continue to accrue on any unpaid tax balance until it is fully paid.
How long should I keep records related to my sales and use tax returns?
It's recommended to keep all records related to your sales and use tax returns for at least three years from the due date of the return or the date the return was filed, whichever is later. This includes documents such as sales receipts, purchase invoices, and exemption certificates. These records may be necessary in case of an audit or to support the amounts reported on your returns.
Is SaaS taxable in North Carolina?
No, SaaS is not taxable in North Carolina since it is considered a service.
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