Cuts in North Carolina’s personal and corporate income tax rates have taken effect.
Legislation passed by the General Assembly in 2017 and strongly supported by NFIB reduced the state income tax on personal wages and other earnings from about 5.5 percent to 5.25 percent.
The state income tax rate for corporations fell from 3 percent to 2.5 percent. This is the lowest corporate tax rate among all the southern states and among any of the states collecting corporate taxes.
Under the legislation, families filing jointly and earning up to $20,000 won’t have to pay any state income taxes. The threshold had been $17,500. Individuals, meanwhile, won’t have to pay any state income tax if they earn less than $10,000. Their zero tax bracket had been $8,750.
NFIB joined with other business groups in urging lawmakers to pass these historic tax cuts. “This is a big victory for North Carolina’s small businesses, and it will help them save thousands of dollars a year.”