Corporate Tax Rate: North Carolina Ranks #3 in the United States for 2019
by Think Currituck, on 11/9/18 12:49 PM
North Carolina’s corporate income tax ranks No. 3 in the nation according to the Washington, D.C.-based Tax Foundation.
North Carolina has held its position on the latest State Business Tax Climate Index for the non-partisan, pro-business Tax Foundation. The annual index considers personal and corporate income, sales, unemployment insurance and property tax rates to determine the overall rankings.
North Carolina holds its 12th place rank in the nation overall in the 2019 State Business Tax Climate Index. Among other states in the Southeast U.S., North Carolina sits at No. 2 overall for best state business tax climate.
North Carolina has been a fixture near the top of the Tax Climate Index since 2015, when it rocketed from 44th place to 16th in a single year. The jump came after a major overhaul of business and individual income taxes in 2013.
North Carolina may see some more upward momentum in the next index since the state plans to lower business and personal income tax rates in 2019. NC’s corporate income tax rate (the lowest among states who have one) is set to drop in 2019 from 3 percent to 2.5 percent. The state’s flat-rate personal income tax will fall from 5.499 percent to 5.25 percent.
In the latest report, the Tax Foundation says: “Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state’s economy… A state with lower tax costs will be more attractive to business investment and more likely to experience economic growth.”
The report also points out that tax laws “change a state’s competitive position relative to its immediate neighbors, its region, and even globally.”
“Ultimately, it will affect the state’s national standing as a place to live and to do business,” they add. “Entrepreneurial states can take advantage of the tax increases of their neighbors to lure businesses out of high-tax states.”
That’s even better news for North Carolina, since we seem to have a “tax-rate lead” on our closest neighbor states: Tennessee (16th), Virginia (22nd), Georgia (33rd) and South Carolina (35th).