The majority of items sold in North Carolina are subject to a 4.75% state sales tax. The majority of apparel, shoes, and accessories are exempt from sales tax in North Carolina. According to the law, clothing includes all articles made to be worn on or near the body, such as hats, gloves, scarves, and hosiery. However, since they are not considered apparel, things like costumes, sporting goods, and safety equipment must be subject to sales tax.
In North Carolina, certain items, such as food, prescription medications, and medical supplies, are also exempt from paying sales tax. Sales tax is, however, required for several products, including prepared meals, dietary supplements, and cosmetics. The county or municipality where the purchase is made may also have a different sales tax rate, with rates ranging from 6.75% to 7.5%.
Alcohol is subject to a state excise tax in North Carolina as well, with rates changing based on the beverage. While wine is subject to a 30 cent per liter tax, beer is taxed at a rate of 53 cents per gallon. Fortified wine is taxed at a rate of $1.35 per liter, while distilled spirits are taxed at a cost of $30.95 per gallon. The state sales tax, which also applies to the purchase of alcohol, is in addition to these levies.
Although North Carolina levies a sales tax on a variety of goods, in comparison to other states in the union, it is not thought to have a high tax rate. With an average tax rate of 9.8%, North Carolina has the 22nd highest state and local tax burden in the nation, according to the Tax Foundation. This is less expensive than nearby states like Tennessee and Virginia, where the equivalent tax rates are 10.2% and 9.9%.
For seniors looking to retire, states with no state income tax include Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. North Carolina does not fit into this group, though. While the state does not tax Social Security benefits, it does tax pensions and IRA distributions, among other sources of retirement income.
In conclusion, even though North Carolina levies sales tax on a variety of commodities, clothing and a few other items are exempt. Additionally, the state levies an excise tax on alcoholic beverages, with rates changing according to the beverage. Although North Carolina has lower taxes than some of its neighbors, it does not have a zero income tax rate like some other states in the nation.