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?
Get facts about taxes in your state and around the US
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.
2 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?
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.
5 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 FDA’s proposal to ban flavored cigars would carry significant revenue implications for many state governments.
7 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
