Taxes in North Carolina

North Carolina Tax Rates, Collections, and Burdens

How does North Carolina’s tax code compare? North Carolina has a flat 4.75 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 6.99 percent. North Carolina’s tax system ranks 10th overall on our 2023 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?

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

North Carolina Senate Considers New Tax Plan

June 12, 2013

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

June 11, 2013

North Carolina House Tax Plan Passes Second Reading

June 7, 2013

North Carolina Considers Impressive Tax Reform Options

June 7, 2013

Update on North Carolina Tax Reform Efforts

May 31, 2013

Critics of North Carolina Tax Reform Miss the Point

May 15, 2013

Washington’s Troublesome Blank Bills

March 22, 2013

A Guide to Tax Reform Options for North Carolina

January 28, 2013

Four options for reforming N.C.’s tax system

January 27, 2013

North Carolina Tax Reform Options: A Guide to Fair, Simple, Pro-Growth Reform

January 23, 2013

Unemployment Drops in 46 States: Exceptions are Hawaii, Illinois, Mississippi, North Carolina

January 26, 2012