NC is pretty confusing when you think about it. You may find this article humourous:

http://www.charlotte.com/mld/observer/2003/02/01/news/local/5080552.htm

In North Carolina, there's a 2 percent statewide tax on grocery items, such as milk, eggs and bread.
...
To confuse matters even further, services are exempt, but in both Carolinas, dry cleaning services are not

Had to add this on the USE tax which is what really pertubes NC residents (when they know about it):


North Carolina has a use tax on purchases made outside the State for use in North Carolina. Residents are responsible for paying the use tax on purchases for which no North Carolina sales or use tax has been charged. The use tax applies to transactions that would be subject to sales tax if the purchase were made in North Carolina. The use tax rate is the same as the sales tax rate that would apply to the purchase if it were made in North Carolina.

In the past, individuals who purchased consumer items had to complete Form E-554, Consumer Use Tax Return, to report and pay their use tax on these items. Beginning with the 1999 tax year, individuals who are required to file an Individual Income Tax Return must report and pay the use tax on those returns. Individuals who are not required to file an Individual Income Tax Return should continue to report and pay the use tax on Form E-554. Businesses must register and file Form E-500, Sales and Use Tax Return, to report and remit use tax due on items purchased for use in their business.

from:

http://www.dor.state.nc.us/taxes/sales/use.html

NC doesn't want to lose any potential tax revenue lost from consumers purchasing on the internet!

>Hi,
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>Texas is only one of about four or five states that does not have a state income tax. All revenue for the state's butdet come from sales and property taxes, so Texas has one of the most complex state sales tax system around.
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>In Texas only residents of the our state are subject to the state income tax. This is only fair, since the sales tax revenue is spent on project that really only benefit the local state residents like Texas Highways and Bridges which are some of the finest in the world. It wouldn't make much sense to subject a resident of NC, for example, to our tax, since NC residents do not benefit from expenditures under the Texas budget.
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>Perhap the most important thing under the Texas Sales Tax Law is determining who/what is taxable. For example, a contractor that install a heating/Air Conditioning system is subject to collect a state income tax if the system is installed in a commercial enterprise. If the system is installed in a residence, the state sales tax does not apply. Non-profit organizations are exempt from sale tax as are purchasers who acquire merchandise strickly for resale. Sale tax is only collect from the final purchases which prevent inflated tax due to churning.
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>Some merchandise is tax, and some is exempt. No tax is collected on basic groceries, while a tax applies to cosmetics. I would love to see Texas go to a simple state income tax, if it would eliminate the confusing mess of sales and property tax laws currently on our books.
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>LelandJ