NC
North Carolina Small Business Tax Guide
North Carolina income and sales tax as NCDOR publishes them, plus federal tax points quoted from IRS pages. An educational overview, not tax advice.
Disclaimer: This page is educational content only. Tax laws change, and your situation may differ. It is not legal, tax, or financial advice. Consult a qualified professional licensed in North Carolina before making filing or planning decisions.
Tax landscape for small businesses
The North Carolina Department of Revenue (NCDOR) is the source for the state figures here, and IRS pages for the federal ones. Each quote sits next to the page it came from and the date it was checked.
NCDOR's tax rate schedules page (North Carolina, checked October 31, 2026) says "For Taxable Years after 2025, the North Carolina individual income tax rate is 3.99% (0.0399)." For the year before, it says "For Taxable Years beginning in 2025, the North Carolina individual income tax rate is 4.25% (0.0425)." It also warns: "Additional rate changes may apply to tax years beginning with 2027 based on certain rate reduction triggers."
For sales tax, NCDOR's guidance for newly registered taxpayers (North Carolina, last modified September 23, 2026) says items sold at retail "are subject to the 4.75% general State rate and applicable local and transit rates of sales and use tax". The same page says "You must file a return even if you do not owe tax unless you have registered solely as a wholesale merchant."
Worked example, with sample figures: a $2,000.00 taxable sale at the "4.75% general State rate" NCDOR gives (North Carolina, last modified September 23, 2026) carries $95.00 of state tax (2,000.00 × 0.0475), or $2,095.00 before county and transit tax. NCDOR adds "applicable local and transit rates", so check the county rate before you invoice.
Tax overview
Each row lists a tax area and its notes. Confirm current figures with your state's tax agency or the IRS.
| Tax type | Rate or basis | Notes |
|---|---|---|
| Individual income tax | "3.99% (0.0399)" | NCDOR tax rate schedules (North Carolina, checked October 31, 2026): "For Taxable Years after 2025, the North Carolina individual income tax rate is 3.99% (0.0399)." "For Taxable Years beginning in 2025, the North Carolina individual income tax rate is 4.25% (0.0425)." |
| Sales and use tax, general state rate | "4.75% general State rate" | NCDOR guidance for newly registered taxpayers (North Carolina, last modified September 23, 2026): items sold at retail "are subject to the 4.75% general State rate and applicable local and transit rates of sales and use tax". |
| Local rate change | "an additional 1% local rate" | NCDOR historical rates page (North Carolina, checked October 31, 2026): "effective July 1, 2026, Mecklenburg County levied an additional 1% local rate of tax." |
| Federal self-employment tax | "15.3%" | The IRS self-employment tax page (In the US (federal), last reviewed or updated October 30, 2026): "The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance)." |
Filing requirements
This list isn't a complete checklist for your business.
Sales tax returns, even with no tax due
NCDOR's guidance for newly registered taxpayers (North Carolina, last modified September 23, 2026) says "You must file a return even if you do not owe tax unless you have registered solely as a wholesale merchant."
Returns due on a weekend or holiday
The same NCDOR page (North Carolina, last modified September 23, 2026) says "A return and payment due on a Saturday, Sunday, or legal holiday is timely if you file and pay on or before the next business day after the Saturday, Sunday, or legal holiday."
Remote sellers
NCDOR's remote sales questions and answers (North Carolina, as retrieved on November 1, 2026) answer the threshold question this way: "The threshold for a seller to become engaged in business in North Carolina is having gross sales in excess of one hundred thousand dollars ($100,000) sourced to North Carolina in the previous or current calendar year (“Threshold”), including sales as a marketplace seller and marketplace-facilitated sales." Under a heading dated "Effective July 2, 2026", such retailers "must register and begin collecting and remitting sales and use tax on or before the first day of the first calendar month occurring at least 60 days after the retailer's gross sales exceeded the Threshold."
Buying for resale
NCDOR's guidance for newly registered taxpayers (North Carolina, last modified September 23, 2026) says "To purchase items for resale exempt from tax, you must provide the seller (1) a completed Form E-595E, Streamlined Sales and Use Tax Certificate of Exemption, or (2) electronically provide your name, address, certificate of registration number, reason for exemption, and type of business." For the seller's side it adds "If you do not keep records that establish a sale is exempt from tax, you are liable for tax on the sale."
Federal estimated tax
The IRS estimated taxes page (In the US (federal), last reviewed or updated September 25, 2026) says "Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed."
Deductions and write-offs
Confirm with your state how it treats each item.
- Federal SE tax: per the IRS self-employment tax page (In the US (federal), last reviewed or updated October 30, 2026), "You can deduct the employer-equivalent portion of your self-employment tax in figuring your adjusted gross income."
- Backing up deductions: the IRS recordkeeping page (In the US (federal), last reviewed or updated May 1, 2026) says "You may choose any recordkeeping system suited to your business that clearly shows your income and expenses."
Practical tips
- Plan for rate changes. NCDOR's rate schedules page (North Carolina, checked October 31, 2026) says "Additional rate changes may apply to tax years beginning with 2027 based on certain rate reduction triggers."
- Recheck county rates. NCDOR's historical rates page (North Carolina, checked October 31, 2026) says "effective July 1, 2026, Mecklenburg County levied an additional 1% local rate of tax."
- Keep each county rate in your invoicing. Billed's invoice software page says "Save your tax rates and settings once, and Billed calculates taxes automatically when you create invoices and estimates."
- Hold on to receipts. Billed's expense tracking page says "Attach the receipt when you record the expense, and it stays with that entry in your Billed account instead of in a drawer or an inbox."
Frequently asked questions
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At a glance
| Topic | What NCDOR or the IRS says |
|---|---|
| Income tax after 2025 | "3.99% (0.0399)" (rate schedules, North Carolina, checked October 31, 2026) |
| Sales tax, state | "4.75% general State rate" (newly registered guidance, North Carolina, last modified September 23, 2026) |
| Zero-sales periods | "You must file a return even if you do not owe tax unless you have registered solely as a wholesale merchant." (North Carolina, last modified September 23, 2026) |
| Self-employment tax | "The self-employment tax rate is 15.3%." (IRS, In the US (federal), last reviewed or updated October 30, 2026) |
When this isn't for you
Aimed at North Carolina sole proprietors and small companies wanting NCDOR's wording beside the federal points. Franchise tax, payroll and audits aren't covered here; NCDOR or a tax professional can advise.