Is Food Exempt from Sales Tax?

Food is exempt from the State portion of sales tax (4.75%) but local sales taxes (Articles 39, 40 and 42) do apply to food to make up a 2% sales tax on food. The Article 43 (half-cent Transit Tax) and Article 46 (quarter-cent county sales tax) do not apply to food. 

“Non-qualifying food” includes prepared foods and beverages in restaurants, dietary supplements, food sold through vending machines, bakery items sold with eating utensils, soft drinks and candy.

The 4.75% general sales rate tax plus local taxes, including the transit and Article 46 sales tax, are charged on purchases of "non-qualifying food."

The reduced 2% local tax rate is charged on “qualifying food,” which includes groceries and bakery items sold without eating utensils.

Show All Answers

1. What is the total Orange County Sales Tax rate?
2. Is Food Exempt from Sales Tax?
3. Are there separate State and County distribution methodologies?
4. Are remote sellers required to collect sales and use tax on sales made via the Internet?
5. Who is considered a remote seller?
6. When making a sale, does the merchant collect tax for the state that you are located in or the state where the customer is located?
7. How do merchants determine where the sale occurred?
8. Is this a new tax?
9. What is Nexus in North Carolina?