State Taxes at a Glance – North Carolina
| Type of Tax | 2023 |
|---|
| Individual Rates | 4.75% flat tax |
| Corporate / Business Tax Rates | 2.50% flat tax |
| Gross Receipts Tax | None |
| Sales Tax | 6.99% (average) |
| Property Taxes | 0.82% as a percentage of primary home |
| Estate or Inheritance Tax | None |
State Income Taxes in North Carolina
The state of North Carolina is one of few states with a flat individual income tax (similar to Colorado and Kentucky). North Carolina’s individual tax rate is 4.75%.
State Business Taxes in North Carolina
The state of North Carolina has a low flat Corporate Tax rate of 2.5%. The Corporate tax rate is only assessed on C Corporations. For other business entities that are flow-thru entities (such as S Corporations, LLCs, etc.) they are taxed at the individual tax rate.
Franchise Tax in North Carolina
In addition to the corporate tax, North Carolina has a Franchise Tax. The Franchise tax is assessed on both C Corps and S Corps. It is a minimum tax of 0.15% of asset values or $200. The asset values are based on the largest of either capital stock, appraised value of tangible property, or investment in tangible property.
Sales and Property Taxes in North Carolina
Sales Tax – like many states, North Carolina has multiple tax rates. One at the state level and another at the local level. The state rate is 4.75% the average local rate is 2.24% (total average rate for North Carolina Sales Tax is 6.99%).
Property Taxes in North Carolina – the average property tax rate for residential property in the state of North Carolina is 0.85%. North Carolina has a low property tax per capita with collections being at only $974. This makes it a preferable place to own property.
North Carolina DMV fees
North Caroline’s DMV Registration Fees are an Ad Valorum tax, meaning it’s based on the value of the vehicle. That mean it’s deductible on your tax return.
Here is a link to the North Carolina DMV website.
North Carolina Domicile
If you maintain a permanent place of abode for over 183 days, you are considered a North Carolina resident.
North Carolina Tax on Social Security Benefits
Even though there is a state income tax in North Carolina, they do not assess state income tax on social security benefits.
Payroll Taxes in North Carolina
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – North Carolina has a wage base of $29,600
- UI Rates – range from 0.06% to 5.76%
- Schedules – North Carolina has a single rate schedule regarding UI.
North Carolina Business Entities – LLCs
North Carolina one of the more expensive states to set up your LLC. Here are some important facts:
- North Carolina has an annual fee of $200.
- When you register with the state, you pay a one time fee of $125
- Secretary of State of North Carolina website –click here
North Carolina Tax Contact Phone Numbers
Important phone numbers for the North Carolina Department of Taxation:
- Website: www.ncdor.gov
- Phone# for Individuals – (877) 252-3052
- Phone# for Businesses – Same