I'm trading an AR for another AR and we're both willing to drive to North Carolina to save on shipping costs. I live in East Tennessee and he lives in South Carolina near the NC border. I've called a gun store in the NC area who does FFLs and he said he's got a call into their ATF guy to ask if they're allowed to do the transfers with us both being out of state. It's hard to find this specific topic on Google so does anyone here know if it's allowed or do we just have to send it from each of our FFLs in our own area? Thanks.

Yes, it's legal.

It's federally legal.  Some states have their own laws that prevent their residents from purchasing certain long guns outside the state, but NC and SC aren't included in that list.

Gonna suck if you get a NICS delay.