Vehicles titled in North Carolina may be exempt from the highway-use tax under the following circumstances:
- An insurance company is obtaining a salvage title for a vehicle on which a total loss claim was paid
- A title is being transferred to a manufacturer or retailer for reselling a vehicle
- A name is being changed or correct on a title
- A vehicle is being transferred by a will or intestacy
- A vehicle is a gift between spouses, a parent and child or a stepparent and a stepchild
- A vehicle is being transferred because of marital separation or divorce agreement
- A vehicle is being transferred from one co-owner to reflect the removal of another co-owner
- The N.C. Department of Health and Human Services is transferring a modified vehicle to a person with a disability
- A title is being transferred to a local board of education for a driver education program when the vehicle is transferred by a retailer and returned within 300 days
- A title is being transferred to a volunteer fire department or volunteer rescue squad that:
- Is not part of a unit of local government
- Has no more than two paid employees
The volunteer fire department or rescues squad must also be exempt from North Carolina income tax, under G.S. 105-130.11, when the motor vehicle is one of the following:
- A fire truck, a pump truck, a tanker truck or a ladder truck used to suppress fire
- A four-wheel drive vehicle intended to be mounted with a water tank and hose and used for forest fire fighting
- An emergency services vehicle
- A title is being transferred to a state agency from a local government, volunteer fire department or volunteer rescue squad to enable the state agency to transfer the vehicle to another unit of local government, volunteer fire department or volunteer rescue squad
- The title is being transferred to a revocable trust from an owner who is the sole beneficiary of the trust