North Carolina Income & Tax for eCommerce Businesses

💡 Corporate Tax Is Being Phased Out — But Not Gone Yet: North Carolina's corporate income tax rate is dropping each year toward zero. For 2026, the rate is 2.0%. While this trajectory is seller-friendly, businesses with North Carolina nexus still have filing obligations during the phase-down period — and franchise tax obligations apply regardless.

Part 1: North Carolina Corporate Income Tax (Phasing Out)

North Carolina enacted legislation to phase out its corporate income tax over several years. The schedule is:

• 2024: 2.5%

• 2025: 2.25%

• 2026–2027: 2.0%

• 2028–2029: 1.0%

• 2030 and beyond: 0%

For the 2026 tax year, the rate is 2.0% — one of the lowest corporate income tax rates in the country among states that still have one. C corporations with North Carolina nexus must still file returns and pay the applicable rate during the phase-down period.

North Carolina Franchise Tax

In addition to the corporate income tax, North Carolina imposes a Franchise Tax on corporations (both C corps and S corps) doing business in the state. The minimum franchise tax is $200. This tax is separate from the income tax and applies even during the corporate income tax phase-out period.

What Creates North Carolina Income Tax Nexus?

North Carolina corporate income tax nexus is triggered for:

• All active and inactive domestic corporations registered in the state

• Foreign corporations doing business in North Carolina

• Owning, leasing, or using property in North Carolina — including FBA inventory

• Having employees, contractors, or agents operating in the state

• Generating income from North Carolina sources through regular commercial activity

PL 86-272 in North Carolina

Federal Public Law 86-272 protects C corporations from North Carolina's corporate income tax if their only in-state activity is soliciting orders for tangible goods approved and shipped from outside North Carolina. As in other states, FBA inventory stored in North Carolina warehouses or having employees who do more than solicit orders will eliminate this protection.

Part 2: North Carolina Sales Tax

Updated Economic Nexus Rules (2024)

North Carolina simplified its economic nexus rules effective July 1, 2024, when it eliminated the 200-transaction threshold. Sales tax economic nexus is now based solely on:

• $100,000 in gross sales sourced to North Carolina in the previous or current calendar year

• The calculation includes marketplace sales — unlike many states, North Carolina counts sales through marketplace facilitators toward the seller's individual threshold

• Once you meet the threshold, you must register and collect immediately — there is no grace period in North Carolina

North Carolina Sales Tax Rate

The state base sales tax rate is 4.75%. Counties add a uniform 2% local tax (in most cases), resulting in a combined rate of 6.75% for most of the state. Some areas with special transit or other districts can reach up to 7.5% in total. North Carolina is a destination-based state for remote sellers.

FBA Sellers: North Carolina Exposure

Amazon operates fulfillment centers in North Carolina, including facilities in the Greensboro and Charlotte areas. FBA inventory stored in these locations creates immediate physical nexus for both sales tax and corporate income tax. If you are an FBA seller and are not currently registered in North Carolina, this is a compliance gap worth addressing promptly.

Important: Marketplace Sales Count Toward Threshold

Unlike states such as Pennsylvania and Florida, North Carolina includes marketplace-facilitated sales (like Amazon FBA sales) in the seller's $100,000 threshold calculation — even though the marketplace collects and remits the tax. This means your total North Carolina sales volume across all channels determines your nexus status, even if you don't personally collect any North Carolina tax.

What About Sales Tax?

North Carolina's combined rate of 6.75–7.5%, its inclusion of marketplace sales in the nexus threshold, and its destination-based sourcing rules make it a state where careful monitoring is essential for growing eCommerce sellers.

At Tall Oak Advisors, we put together this guide as a resource for our eCommerce community. Tax rules vary significantly from state to state, and we want sellers to have the information they need to make informed decisions. More info at talloakadvisors.com

Disclaimer: The information in this article is for general informational purposes only and does not constitute legal or tax advice. Tax laws change frequently. Consult a qualified tax advisor or CPA regarding your specific situation.

Sources: N.C. Gen. Stat. § 105-130 (Corporate Income Tax); NCDOR Remote Sales Guidance; N.C. Franchise Tax; Economic Nexus Rules (eff. Nov. 1, 2018, updated July 1, 2024); Tax Foundation 2026 State Tax Changes; Pub. L. No. 86-272.