Taxes in North Carolina

North Carolina Tax Rates, Collections, and Burdens

How does North Carolina’s tax code compare? North Carolina has a flat 4.99 percent individual income tax rate. North Carolina also has a 2.50 percent corporate income tax rate. North Carolina has a 4.75 percent state sales tax rate, a max local sales tax rate of 2.75 percent, and an average combined state and local sales tax rate of 6.98 percent. North Carolina’s tax system ranks 11th overall on our 2022 State Business Tax Climate 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: How Does Your State Compare?

Facts and Figures 2020: How Does Your State Compare?

February 13, 2020

Tax Trends at the Dawn of 2020

January 6, 2020

Despite Budget Standoff, North Carolina Implements Sales Tax Base Expansion

August 1, 2019

North Carolina’s Vetoed Budget Includes Good Tax Provisions

July 18, 2019

Will North Carolina Reduce its Franchise Tax?

April 15, 2019

Facts and Figures 2019: How Does Your State Compare?

March 19, 2019

North Carolina Judge Strikes Down Income Tax Cap Constitutional Amendment

February 26, 2019

Tax Changes Taking Effect January 1, 2019

December 27, 2018

Results of 2018 State and Local Tax Ballot Initiatives

November 6, 2018

Top State Tax Ballot Initiatives to Watch in 2018

October 22, 2018

2019 State Business Tax Climate Index

September 26, 2018

Is Every Tax Cut Kansas?

May 16, 2018

Help from Our Friends: What States Can Learn from Tax Reform Experiences across the Country

May 15, 2018

North Carolina Continues its Successful Tax Reforms

October 27, 2017

North Carolina’s Tax Reform Experience Isn’t Comparable to Kansas

June 19, 2017

North Carolina Set to Post Another Large Budget Surplus

May 8, 2017

Several States Will Start 2017 with Corporate Tax Reductions

December 30, 2016

2017 State Business Tax Climate Index Released Today!

September 28, 2016

Lunch Links: Trump Takes Hits from Clinton (Release Tax Returns) and Forbes (Troublesome Pass-Through Rate Reduction); NCSL Calls on Congress for Marijuana Reforms

August 11, 2016

Lunch Links: State Legislators Talk Transportation Funding; Trump Pass-Through Plan Problems; Property Tax Turnout in Utah

August 10, 2016