North Carolina Tax Nexus

Businesses with nexus in North Carolina are required to register with the North Carolina Department of Revenue and to charge, collect, and remit the appropriate tax.

Generally, a business has nexus in North Carolina when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.

North Carolina nexus for out-of-state sellers

Nexus can be created in North Carolina when a retailer purposefully or systematically seeks business 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.

Click-through nexus

Referrals from in-state entities can trigger nexus for out-of-state sellers under the state’s click-through nexus provisions. Remote sellers are presumed to be engaged in business in North Carolina if both the following conditions are met:

  • The retailer solicits or transacts business in North Carolina by employees, independent contractors, agents, or other representatives or enters into an agreement with a resident of North Carolina under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an internet web site or otherwise, to the retailer
  • The cumulative gross receipts from sales by the retailer to North Carolina purchasers who are referred to the retailer by all residents with this type of agreement exceed $10,000 during the preceding four quarterly periods

See 2009 Law ChangesForm E-505_8-09,  NCGA Statutes Article 5 (specifically § 105-164.8), and Sales and Use Tax Registration.