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The Tax Foundation is the nation’s leading independent tax policy nonprofit. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and global levels. For over 80 years, our goal has remained the same: to improve lives through tax policies that lead to greater economic growth and opportunity.
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?