Are virtual goods subject to taxation?

In North Carolina, virtual goods are subject to taxation. This means that if you purchase a virtual item or service, or if you receive money or other virtual items from another user, you may be subject to applicable taxes in North Carolina. The North Carolina Department of Revenue (NCDOR) regulates the sale of virtual goods and services. They require purchasers of virtual goods and services to pay the applicable state and local taxes, and generally, require sellers of virtual goods and services to collect and remit those taxes to the NCDOR. It is important to note that virtual goods are treated differently than tangible goods and services. Generally, virtual goods are not subject to sales tax, as they are not physical goods that are delivered to the buyer. However, North Carolina applies a 6.75% sales tax on the sale of any virtual item or service, including virtual currency, game downloads, and digital subscription services. In addition, virtual currency, such as Bitcoin, is subject to the North Carolina franchise and income tax. If you are engaged in a business which is related to virtual currency or digital asset transactions, you are likely liable for taxation. Therefore, virtual goods in North Carolina are subject to taxation and, depending on the type of virtual item or service, it may be subject to either sales tax or income tax. It is important to consult a tax professional to determine your exact tax liability.

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Are virtual goods subject to taxation?

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