State & Local Taxes

North Carolina is among the states with the lowest effective business tax rates in the country.  Our state maintains the highest rating (AAA) from all three major bond rating agencies. In North Carolina, only the state has the authority to tax corporate income and there is no state property tax. Additionally, there is no tax, state or local, on inventories or intangibles.

North Carolina Corporate Tax Rate

The North Carolina Corporate Tax Rate is 2.5%. Of the 44 states that levy a corporate income tax, North Carolina has the lowest rate. In 2025, the rate will decrease to 2.25% with a planned decrease to 2% in 2026; 1% in 2028; and a decrease to 0% in 2029.

Property Tax Rates

Real and personal property are taxed by the local government, with a single property tax assessment in each county. The value determined by the county assessor constitutes the base for all levies, including those of cities and towns on property located within the municipality. Property is assessed at 100% of its appraised value.

County/Municipality – FY 2022-2023	Tax Rate Per $100 Valuation
Halifax County	$0.76
Town of Enfield	$0.927
Town of Halifax	$0.66
Town of Hobgood	$0.72
Town of Littleton	$0.80
City of Roanoke Rapids	$0.661
Town of Scotland Neck	$0.785
Town of Weldon	$0.720
Rate does not include special assessments, which are location specific.

Exemptions

• Inventories are exempt from property taxes.
• Recycling equipment and facilities used exclusively for recycling and resource recovery are exempt from property taxes.

Sales & Use Tax

Retail sales of tangible personal property not subject to a reduced rate of tax are subject to the 4.75% general State rate of sales or use tax and a 2.25% local rate (combined 7%).

North Carolina offers tax exemptions and allowances for manufacturers:

• Machinery & Equipment – Sales & Use Tax Exemption – Mill (generally manufacturing) machinery including parts and accessories as well as specialized equipment for loading or processing, is exempt from sales and use tax.  North Carolina does not levy a sales and use tax on repairs to industrial machinery or service contracts for machinery. 
• Raw Materials, Sales & Use Tax Exemption – Purchases of ingredients or component parts of manufactured products are exempt from sales or use tax. In addition, packaging items that constitute a part of the sale (retail or wholesale) and delivered with the product to the customer are exempt from sales and use tax. 
• Electricity, Fuel & Natural Gas Sales & Use Tax Exemption – Retail sales, as well as the use, storage or consumption of electricity, fuel and piped natural gas sold to a manufacturer for use in the manufacturing process are exempt from sales and use tax for use in a manufacturing operation.  
• Inventory – Property Tax Exclusion – North Carolina and it’s local governments do not levy a property tax on inventory. 
• Large Fulfillment Facility, Sales & Use Tax Exemption – Sales of equipment, or an accessory, an attachment, or repair part for equipment that is sold to a large fulfillment facility is exempt from sales and use tax. It must also be used at the facility in the distribution process, which includes receiving, inventorying, sorting, repackaging, or distributing finished retail products. Electricity is not eligible for the sales tax exemption.  To qualify for this exemption, the Secretary of Commerce must certify that an investment of $100 million dollars (real and tangible personal property) for the facility within 5 years after the date on which the first property investment is made and that the facility will reach an employment level of at least 400 within 5 years. 
• Data Centers – Electricity and support equipment at a “Qualifying Data Center” and computer software at any data center.
• Other Exemptions – Pollution control and abatement equipment and equipment for Research and Development in the Physical Engineering, Life Sciences companies (NAICS 54171) and Software Publishers (NAICS 5112).

Unemployment Insurance (UI)

1.0% (first 2 years) – New Employer Tax Rate
0.06% – Minimum Tax Rate
5.76% – Maximum Tax Rate
$25,200 – Taxable Wage Base (per employee)

Franchise Tax

The NC Franchise tax rate is $1.50 per $1,000 of the largest of either:

1. The net worth apportioned to North Carolina
2. 55% of appraised value of property in the state subject to taxation
3. Book value of real and tangible property in the state less accumulated depreciation

For a S Corporation, the tax rate is $200 for the first $1 million of the corporation’s tax base and $1.50 per $1,000 of the tax base exceeding $1 million.

North Carolina Personal Income Tax

The North Carolina Personal Income Tax Rate is a 4.75% flat rate. Personal income tax rates decrease to 4.6% in 2024; 4.5% in 2025; 4.25% in 2026; and 3.99% in tax years after 2026.

In 2022, the standard deduction increased to $25,500 for married couples and surviving spouses; $19,125 for heads of households; and $12,750 for single taxpayers and those married filing separately.

Occupancy Tax

A local occupancy tax on the rental of rooms and lodging is levied in Halifax County primarily for the purpose of generating revenue to promote travel and tourism. Halifax County’s occupancy tax rate is 5%. Within the City of Roanoke Rapids, the occupancy tax rate is 6%.