The US state of North Carolina has phased out the 200-transaction sales tax threshold for retail merchants and marketplace facilitators under Session Law 2024-28, which was recently signed into law by Governor Roy Cooper (D).
Effective 1 July 2024, remote sellers are required to collect and remit sales and use tax only if their gross sales from remote transactions sourced to North Carolina exceed USD 100,000.
Under prior law, remote sellers outside of Missouri had to collect sales tax in North Carolina if they had over USD 100,000 in gross revenue from remote sales in the current or previous calendar year or conducted 200 or more transactions. The Session Law 2024-28 effectively eliminates this 200-transaction threshold, starting 1 July 2024.
Following the approval of this bill, the North Carolina Department of Revenue released a Directive on 1 July 2024, in which it provided the interpretation of the Secretary of Revenue regarding the repeal of the transaction threshold for remote sellers.
The directive addresses:
- Overview of remote seller thresholds;
- Repeal of transaction thresholds;
- Information for remote sellers who exceeded the transaction thresholds;
- Examples regarding the new requirements for remote sellers.
The Directive also clarified remote sellers who may have registered with the department and obtained a certificate of registration before 1 July 2024, solely because they exceeded the transaction thresholds, will be allowed to cancel their registration if it meets the following requirements:
- Did not make gross sales sourced to North Carolina of more than USD 100,000 during 2023;
- Did not make gross sales sourced to North Carolina of more than USD 100,000 from 1 January, 2024, through the date it cancels its Registration in 2024;
- Is not otherwise engaged in business in the State.
