How does North Carolina’s tax code compare? North Carolina has a flat 4.50 percent individual income tax rate. North Carolina has a 2.5 percent corporate income tax rate. North Carolina also has a 4.75 percent state sales tax rate and an average combined state and local sales tax rate of 7.00 percent. North Carolina has a 0.63 percent effective property tax rate on owner-occupied housing value.
North Carolina does not have an estate tax or inheritance tax. North Carolina has a 40.65 cents per gallon gas tax rate and a $0.45 cigarette excise tax rate. The State of North Carolina collects $4,859 in state and local tax collections per capita. North Carolina has $4,431 in state and local debt per capita and has an 89 percent funded ratio of public pension plans. North Carolina’s tax system ranks 12th overall on the 2025 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and North Carolina is no exception. The first step towards understanding North Carolina’s tax code is knowing the basics. How does North Carolina collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?
Subscribe to get insights from our trusted experts delivered straight to your inbox.
Subscribe
Get facts about taxes in your state and around the U.S.
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.
115 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.
2 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 min read
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?
8 min read
Graduated corporate rates are inequitable—that is, the size of a corporation bears no necessary relation to the income levels of the owners.
7 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 32 percent of state tax collections and 13 percent of local tax collections (24 percent of combined collections).
9 min read
While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts.
12 min read
If the policy goal of taxing cigarettes is to encourage cessation, vapor taxation must be considered a part of that policy design.
4 min read
The Kansas experience is so infamous that “what about Kansas?” is almost guaranteed to be a question—sometimes as a retort, but often a genuine expression of concern—any time any state explores tax relief. But what about the other two dozen states that have cut their income taxes since then?
6 min read
Which states have the highest property taxes in 2022? See how your state compares in property taxes across the United States
5 min read
The sales tax is too important a part of states’ revenue toolkits to be permitted further erosion, making sales tax modernization a vital project of the 2020s.
17 min read
Ranking unemployment insurance tax codes on the 2022 State Business Tax Climate Index. Learn more about state unemployment insurance tax code and systems.
4 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 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.
2 min read
The FDA’s expected announcement of a national ban on menthol-flavored cigarettes and cigars with a characterizing flavor would carry significant revenue implications for both the federal government and state governments, with likely limited benefits in smoking cessation.
6 min read