North Carolina ended the fiscal year with strong revenue growth, according to the state governor’s office, meaning business tax rates will be lower in 2017.
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 from 4 percent to 3 percent beginning Jan. 1, 2017. This will be less than half the 6.9 percent rate paid by North Carolina businesses in 2013, the governor’s office said in a news release.
“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,” North Carolina Gov. Pat McCrory said.
North Carolina’s business tax rate will now be the lowest in the nation among states with a business income tax. The next lowest state business income tax rate is 4.31 percent in North Dakota.
In addition to reducing the business income tax rate in 2017, North Carolina will also reduce the personal income tax rate in 2017 from 5.75 percent to 5.499 percent.