by Think Currituck, on 1/4/17 4:12 PM
On January 1st, North Carolina lowered its corporate income tax rate to 3 percent. The drop gives the state the lowest corporate tax rate in the nation, among states who levy such a tax.
According to the Tax Foundation, "Six states forego corporate income taxes, but four of them impose economically distortive gross receipts taxes in their stead."
In addition to lowering the corporate income tax rate, NC reduced its individual income tax rate from 5.75 to 5.499 percent.
Every year, the non-partisan Tax Foundation ranks the business tax climate of every state. North Carolina's tax adjustments have brought it from 44th to 16th.
The shrinking corporate tax rate began with North Carolina's historic tax reform act of 2013.
According to the Economic Development Partnership of North Carolina, "Tax revenue collections were $21.3 billion, more than $300 million above the threshold for triggering a reduction in the state’s business tax rate."
In a Triangle Business Journal article, Bill Nelson, a partner at Smith Anderson law firm in Raleigh, said, “It will make us much more competitive."
Outgoing Governor Pat McCrory said, “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.”
Though incoming Governor Roy Cooper disagreed with McCrory on many fiscal issues, he told the Associated Press that he would not move to reverse the tax cuts that took effect this year.
"We don't have any plans to try and change the law that's already in place in those areas," Cooper said. "That's not going to happen."