Several new tax cuts went into effect on Jan. 1, making North Carolina even more competitive for jobs and investment.
The corporate tax rate is dropping in North Carolina, starting Jan. 1.
That tax rate drops from about 4 percent to 3 percent when the ball drops – a move that makes North Carolina even more competitive in luring economic suitors from competing states such as South Carolina and Virginia.
Bill Nelson, a partner at Smith Anderson law firm in Raleigh, predicts a lower corporate tax rate will further incentivize businesses looking to expand in North Carolina.
“The 3 percent corporate rate will give North Carolina the lowest corporate rate of any state that levies a corporate income tax rate,” he says. “It will make us much more competitive.”
The corporate rate drop was part of the 2013 tax reforms, and is going into effect because revenue thresholds have been met.
Moreover, a technical change to how multi-state corporations calculate their tax bill will translate into more tax savings.
Personal income tax rates drop slightly further, from 5.75 percent to 5.499 percent; and the standard deduction is increased for all filers ($1k increase for married filing jointly, $500 for single filers). The increased standard deduction is estimated to save taxpayers $145 million this year.