Comprehensive Guide to Sales Tax Exemptions in North Carolina- What Services Are Free from Tax-

What services are exempt from sales tax in North Carolina?

In North Carolina, certain services are exempt from sales tax to promote specific industries and activities. These exemptions are designed to stimulate economic growth and provide benefits to both businesses and consumers. Here’s a closer look at some of the services that are exempt from sales tax in North Carolina.

1. Real Property Services

Real property services, such as legal fees for the sale or purchase of real estate, are exempt from sales tax. This includes services provided by real estate agents, brokers, and appraisers. Additionally, title insurance premiums are also exempt.

2. Insurance Services

Insurance services are generally exempt from sales tax in North Carolina. This includes premiums paid for property, casualty, life, and health insurance. However, there are some exceptions, such as certain types of surety bonds and credit insurance.

3. Legal Services

Legal services provided by attorneys, paralegals, and legal assistants are exempt from sales tax. This includes services related to drafting contracts, wills, and other legal documents, as well as representation in court.

4. Health and Fitness Services

Health and fitness services are exempt from sales tax, which includes gym memberships, personal training, and fitness classes. Additionally, services provided by licensed chiropractors, physical therapists, and occupational therapists are also exempt.

5. Education Services

Education services, such as tuition and fees for public and private schools, are exempt from sales tax. This also includes services provided by educational institutions, such as tutoring and test preparation.

6. Telecommunications Services

Telecommunications services, such as phone, internet, and cable television, are exempt from sales tax in North Carolina. However, there is a 3% excise tax on telecommunication services, which is separate from the sales tax.

7. Utilities

Utilities such as electricity, natural gas, and water are exempt from sales tax. This includes services provided by local utility companies and private water companies.

8. Transportation Services

Transportation services, such as shipping and delivery, are exempt from sales tax. This includes services provided by common carriers, freight forwarders, and motor vehicle transportation.

It’s important to note that while these services are exempt from sales tax, they may still be subject to other taxes or fees. Additionally, some services may have specific conditions or limitations for exemption. To ensure compliance with North Carolina tax laws, businesses and individuals should consult with a tax professional or the North Carolina Department of Revenue for the most up-to-date information.