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. 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?


Related Articles

New Paper Analyzing Further North Carolina Tax Reform This Session

June 16, 2015

North Carolina Proposal Builds on Landmark 2013 Reform

June 15, 2015

North Carolina Tax Revenue Exceeding Expectations Following Tax Cuts

May 8, 2015

Taxes in Many States Changing January 1, 2015

December 31, 2014

Economic Development Officials Call for Special Tax Incentive Session in North Carolina

September 9, 2014

North Carolina Builds on Tax Reform, Repealing Burdensome Local Privilege Taxes

June 5, 2014

North Carolina’s E-Cigarette Tax Proposal

May 27, 2014

Fiscal Times Features Best and Worst States for Taxes

January 29, 2014

2013 Outstanding Achievement in State Tax Reform

January 7, 2014

North Carolina Income Tax Rate Set to Drop in January

November 20, 2013

North Carolina Movie Theatres: Ending Our Special Treatment is “Crippling Blow”

July 24, 2013

More Details Released on North Carolina Compromise Plan

July 16, 2013

North Carolina House, Senate, and Governor Announce Tax Agreement

July 15, 2013

North Carolina Senators Roll Out Updated Compromise Plan

July 1, 2013

North Carolina Legislators Try to Reach Compromise, Media Reports Alleged “McCrory Option”

June 28, 2013

Is a Nonprofit Hospital Sales Tax Refund Defensible in North Carolina?

June 18, 2013

Senator Rucho Resigns as NC Senate Finance Committee Co-Chairman

June 13, 2013

Live Blog of Debate on New North Carolina Senate Tax Reform Proposal

June 12, 2013

North Carolina Senate Considers New Tax Plan

June 12, 2013

Tax Reform in North Carolina: Simple, Neutral, Pro-Growth

June 11, 2013