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Avalara Help Center

Set Up North Carolina Returns

This article applies to:Returns Central

Tell Us Where You Collect Tax

Add North Carolina to the places where you collect tax. This tells AvaTax to calculate tax on North Carolina transactions. See the North Carolina Department of Revenue website for details about nexus, registration, and taxes in North Carolina.

Before you add North Carolina, there are two things you need to do:

You don't have to select a tax type for North Carolina.

"Sourcing" determines the location where a sale is taxed. North Carolina is a destination-sourced state.

Add Your Company Locations 

North Carolina doesn't require location reporting on the returns. Add any physical locations you have in North Carolina to enhance your company setup and track sales by location.

Schedule Your Returns

After you tell us where you collect tax and add locations, you're ready to schedule returns. Go to Returns in AvaTax to provide a funding power of attorney and schedule your returns

Your company name and taxpayer ID from Your Company Details show up on your returns. Make sure they match what’s on your registration information.

Use this info to schedule your returns. Keep in mind that the selections you made when you told us where you collect tax, any location codes you entered, and the forms you select are related and should tie together.

The NC E-500 Sales and Use tax return form and the E-536 Schedule of County Sales and Use tax form are filed as a combined form online.

  • Select form NC E500 E536 if you're registered to remit sales and use tax in North Carolina.
  • Make sure you enter the registration number associated with your account in the correct format. It's a state-assigned, nine-digit number with "600" as the first three digits. Example: 600123456 
  • While configuring North Carolina returns, you can specify the following information for e-file username and password:

    You may notice an error message indicating that the entered credentials are invalid. Ignore this error as you should still be able to save the form.

    • User name: State registration ID or FEIN
    • Password: PIN or company name as registered, including spaces and special characters.

Note: North Carolina does not waive penalty and interest for returns that are mailed.
Since North Carolina is a mandatory electronic filing state, ensure to keep your registrations and logins accurate to avoid the paper filing of returns.

Prepayments

  • Some North Carolina taxpayers are required to make monthly prepayments
  • The prepayment must equal at least sixty-five percent (65%) of any of the following:
    • The amount of tax due for the current month. Avalara doesn't support this calculation method. If you want to use this method, you're responsible for making this adjustment each month.
    • The amount of tax due for the same month in the preceding year (default option)
    • The average monthly amount of tax due in the preceding year
  • See the North Carolina Department of Revenue website or contact the North Carolina Department of Revenue at 877-252-3052 for more info about prepayments

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