North Carolina imposes a general state sales tax of 4.75% on the retail sale, lease, or rental of most goods, including food. Some counties also impose additional local sales taxes that apply to food purchases. However, North Carolina does exempt certain food items from sales tax.

This guide provides an overview of North Carolina food tax calculator, including tax rates, exemptions and administration.

North Carolina Food Tax Calculator

Our North Carolina food tax calculator provides a quick and easy way to estimate the total sales tax on grocery and prepared food purchases across the state. Simply enter your location in NC or select any city or county from the dropdown menu to see the combined state and local tax rates that apply there. The tool will automatically calculate the sales tax amount owed on any food purchase price you input, saving you time and hassle.

Use our free NC food tax calculator before your next trip to the grocery store or restaurant to estimate the sales taxes you’ll owe in order to better budget and plan your food spending. The calculator is updated with all the latest tax jurisdiction rates so you can have confidence in the sales tax amount for food in your area of North Carolina.

Read More: Mn Food Tax Calculator: Exemption and Administration Guide

North Carolina State Sales Tax on Food

The state general sales tax rate on food purchases in North Carolina is 4.75%. This applies to the retail sale of food and food ingredients intended for human consumption.

Some exempted food items include:

• Unprepared food items for home consumption
• Most bakery items
• Bottled water
• Candy
• Soft drinks
• Dietary supplements

Local Sales Taxes on Food in North Carolina

In addition to the 4.75% state sales tax, counties and cities in North Carolina can impose local sales taxes on food purchases. Local sales tax rates range from 2.25% to 2.75%.

Major cities with local sales taxes on food include:

• Charlotte – 2.25%
• Raleigh – 2.25%
• Greensboro – 2.25%
• Durham – 2.25%
• Winston-Salem – 2.25%

So the total sales tax on food purchases in these cities ranges from 7% to 7.5%.

Here is a table of state and local sales tax rates in some popular North Carolina cities:

City	State Sales Tax	Local Sales Tax	Total Sales Tax
Charlotte	4.75%	2.25%	7.0%
Raleigh	4.75%	2.25%	7.0%
Greensboro	4.75%	2.25%	7.0%
Durham	4.75%	2.25%	7.0%
Winston-Salem	4.75%	2.25%	7.0%

Read More: City Wise Michigan Food Tax Calculator: Exemption and administration

Food Exemptions from Sales Tax

North Carolina exempts the following food items from state and local sales taxes:

• Most unprepared food for home consumption
• Bread, rolls, and buns
• Cakes, cookies, and doughnuts
• Powdered drinks
• Salad bar items sold by weight
• Food sold not for profit by schools
• Food sold by churches or nonprofits
• Food purchased with SNAP benefits

So purchases of these products are exempt from paying both state and local sales taxes in North Carolina.

Read More: Wisconsin Food Tax Calculator: Exemptions and Regulations

Taxability of Specific Food Items

Here is an overview of the taxability of some popular food items in North Carolina:

Taxable:

• Restaurant meals
• Prepared deli foods for immediate consumption
• Soft drinks
• Candy
• Dietary supplements

Exempt from tax:

• Bread and baked goods
• Eggs, milk, meat
• Fruits and vegetables
• Bottled water
• Food purchased with SNAP benefits

Ice cream is exempt in containers greater than one pint. Smaller containers are taxed like candy.

Read More: Food Tax in California: Exemptions and Administration

Grocery Food Tax Refund for Low Income Families

North Carolina offers a refund of sales taxes paid on groceries by low income families. This can refund up to $2,500 per year of taxes paid on food.

To qualify, a household must meet gross income requirements. For example, a family of 4 must have a household income under $51,767.

Eligible households can apply annually for the food tax refund. The refund is distributed in October.

North Carolina Food Tax Administration

The administration of North Carolina food tax laws involves both state and local government agencies.

Key roles include:

North Carolina Department of Revenue

The North Carolina Department of Revenue administers the state sales tax, including:

• Collecting state sales tax revenue
• Interpreting tax regulations
• Auditing taxpayers
• Processing refunds
• Overseeing exemptions

The Department of Revenue provides guidance to retailers on computing and charging sales tax. They also enforce compliance with tax laws.

Local Government Agencies

City and county governments in North Carolina administer local sales taxes, including:

• Setting local tax rates
• Collecting local tax revenue
• Auditing local taxpayers
• Providing guidance to retailers

Local government agencies work with the NC Department of Revenue to coordinate administration of state and local sales taxes.

Role of Food Retailers

Food sellers in North Carolina act as agents who collect and remit sales taxes to the state and local governments. Their responsibilities include:

• Registering with tax authorities
• Calculating applicable sales taxes
• Charging sales tax at point of sale
• Filing regular sales tax returns
• Remitting collected taxes to the government

Retailers must keep detailed records of taxable and exempt sales. They may be subject to audits by state and local tax authorities.

Sales Tax Exemptions for Food Retailers

North Carolina provides sales tax exemptions related to food for certain retailers, including:

Wholesale Exemption

Food retailers purchasing inventory for resale are exempt from paying sales tax under the wholesale exemption. This applies to retailers buying food they will resell.

Manufacturing Exemptions

Food manufacturers are exempt from sales tax on equipment and ingredient purchases. This includes exemptions for:

• Packaging materials
• Processing equipment
• Ingredients and components

To qualify, at least 75% of total sales must be to out-of-state customers.

Agriculture Exemptions

Farmers and food growers are exempt from sales tax on many items, including:

• Farm equipment and machinery
• Farm supplies and tools
• Packaging and containers
• Electricity and gas
• Farm vehicles

To qualify, farmers must earn at least $10,000 annually from farming operations. This exemption aims to reduce costs for food producers.

Recent Changes to North Carolina Food Tax Laws

There have been some recent notable changes to food tax laws in North Carolina:

Expansion of Grocery Exemptions (2005)

North Carolina expanded exemptions for grocery food and ingredients in 2005. This removed sales taxes from bread, cookies, powders, salad bar items, and other products.

Removal of Annual Food Cap (2008)

The state previously capped annual sales tax exemptions for grocery food purchases. This cap was removed in 2008, providing full exemptions.

Prepared Food Tax Reduction (2019)

The prepared food tax rate was reduced from 7% to 5.75% in 2019. This saved consumers money on purchases like restaurant meals.

Growing County Food Tax Rates

Many North Carolina counties have gradually increased local sales tax rates on food over the past decade. Rates now reach up to 2.75% in some areas.

Frequently Asked Questions About North Carolina Food Tax

What food items are taxable in North Carolina?

Taxable foods include prepared meals, soft drinks, candy, dietary supplements, and small containers of ice cream. Unprepared grocery foods are generally exempt.

How do I calculate sales tax on food in North Carolina?

Multiplying the cost of taxable food by the 4.75% state tax rate. Add any local taxes that apply based on the purchase location to find the total tax.

Is food taxed differently at grocery stores and restaurants?

Yes. Most unprepared grocery foods are exempt, while prepared restaurant meals are taxed at 5.75%-7.5% based on location.