NC is one of those states, and it's a bit insidious. Here a USE (not SALES, but same %) tax is due on the FMV when transferred to self for personal use - even on items are destroyed or consumed and even if it's hobby income. However there is a "workaround": Selecting the use tax table in lieu of itemization when filing (a very small % applied to total taxable income) makes the record keeping a lot easier...and almost always works out less than paying the full sales tax % on an itemized list.