North Carolina has a flat 3.99 percent individual income tax rate. North Carolina has a flat 2.00 percent corporate income tax rate—one of the lowest in the nation and scheduled to phase down further, a 4.75 percent state sales tax rate, and an average combined state and local sales tax rate of 6.99 percent. North Carolina has a 0.66 percent effective property tax rate on owner-occupied housing value. North Carolina does not have an estate tax or inheritance tax. North Carolina’s gas tax is 41.25 cents per gallon, and its cigarette excise tax is $0.45 per pack of 20 cigarettes.
North Carolina raises tax revenue primarily through individual income taxes (29.0 percent of total state and local tax revenue), general sales taxes (28.8 percent), and property taxes (22.3 percent). North Carolina collects $5,378 in state and local tax collections per capita, carries $4,214 in state and local debt per capita, and has a 94 percent funded ratio of public pension plans. North Carolina’s tax system ranks 13th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and North Carolina is no exception. Use the tabs below to compare North Carolina taxes with other states and to see how North Carolina raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
Tax collections vary widely by state, making per capita collections figures—a measure of collections per person—especially useful, as they allow comparisons across differences in tax rates and bases, economic capacities, and policy decisions that impact the size and scope of government.
5 min read
Rental cars are some of the most heavily taxed transactions in the US. Rather than levying additional taxes on rental cars by trying to export the tax burden to nonresidents, municipalities should enact principled, neutral transportation tax policy that is unlikely to discourage visitors, tourists, and other economic activity.
5 min read
From coast to coast, lawmakers are embracing wealth and millionaires’ taxes. Many of these proposals will face their ultimate test at the ballot box this November, and we should be rooting for these measures to fail.
Millions of Americans, along with significant amounts of income and economic activity, are moving from high-tax states to those with more competitive tax systems and lower overall costs of living.
8 min read
Nearly half of US states regulate and tax recreational markets, and only 10 states still lack a comprehensive medical marijuana program.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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The amount of revenue states raise through roadway-related revenues varies significantly across the US. Only two states raise enough revenue to fully cover their highway spending.
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When evaluating property tax reform options in North Carolina, only changes that restore balance—without distorting investment or shifting costs unfairly—will ensure the state’s local tax system supports, rather than hinders, continued prosperity.
8 min read
Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
The vaping industry has grown rapidly in recent decades, becoming a well-established product category and a viable alternative to cigarettes for those trying to quit smoking. US states levy a variety of tax structures on vaping products.
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