Do I Have Sales Tax Nexus in North Carolina?
- Sales Tax
- May 17, 2016 | Laura McCamy
The first question to ask yourself about sales tax nexus in North Carolina is this: When you step out of your business location, do you set foot on North Carolina soil? If your answer is yes, then you have sales tax nexus there.
Whether you operate your business out of a brick-and-mortar location or your store exists entirely in the virtual world of the Internet, your home base in a state gives you nexus. You need to register to collect NC sales taxes and charge sales tax on the orders you ship to customers in the state.
If you don’t operate your business out of North Carolina or have a satellite office or employee based there, you might think you are off the hook -- but no. Amazon has a fulfillment center in the state, so you could have sales tax nexus in North Carolina if you use Amazon FBA to ship orders from your Amazon store.
For those of you who don’t sell through Amazon and aren’t based in North Carolina, don’t write the state off just yet. There’s one more reason you might need to register to collect and remit NC sales taxes. North Carolina is one of the states with a click-through nexus law. If you partner with a website based in the state that sends customers to you in exchange for commission on sales, that could give you sales tax nexus in North Carolina. Click-through nexus doesn’t kick in until you have $10,000 in sales through this affiliate relationship.
Like more and more states, North Carolina takes an expansive view of what might create nexus for remote sellers. According to NC code, retailers can create nexus
"by purposefully or systematically exploiting the market provided by this State by any media-assisted, media-facilitated, or media-solicited means, including direct mail advertising, distribution of catalogs, computer-assisted shopping, television, radio or other electronic media, telephone solicitation, magazine or newspaper advertisements, or other media."
The same code section goes on to say that just buying ads in North Carolina does not give remote sellers nexus. So go ahead and advertise in North Carolina, just make sure you're not "systematically exploiting the market."
The moral of the story: Don’t take sales tax nexus in North Carolina (or any other state) for granted. You might have nexus that requires you to collect and pay NC sales tax even if you never set foot in the Tar Heel state.