N.C. business rate will be lowest in the nation.
Lower Business and Individual Tax Rates Coming in 2017
In early August, Gov. Pat McCrory announced that North Carolina’s fiscal year ended with strong revenue growth, which has triggered a cut to the state business tax rate for next year.
According to a press release from the governor’s office, this fiscal year’s tax revenues totaled $21.3 billion, which is $300 million past than the threshold for triggering a business tax reduction. Starting Jan. 1, 2017, the rate will drop to 3 percent from 4 percent, which will be the lowest in the nation for states that impose a business income tax. In 2013, the rate was 6.9 percent.
Additionally, there is good news for small businesses who pay taxes at the individual rate as pass-through entities: North Carolina will be reducing the personal income tax rate to 5.499 percent, down from 5.75 percent, in 2017.
“Even in an environment of historic tax cuts, saving taxpayers more than $4.4 billion over five years, state revenues continue to grow due to our tremendous job growth, economic expansion, and responsible fiscal management,” Gov. McCrory said.