Important Tax Information in North Carolina
North Carolina has four tax brackets with rates ranging from 6 percent to 8 percent. More on North Carolina taxes can be found in the tabbed pages below.
Personal income tax
North Carolina collects income taxes from its residents utilizing four tax brackets.
For single taxpayers:
— 6 percent on the first $12,750 of taxable income.
— 7 percent on taxable income between $12,751 and $60,000.
— 7.75 percent on taxable income between $60,001 and $120,000.
— 8 percent on taxable income of $120,001 and above.
For married persons filing joint returns:
— 6 percent on the first $21,250 of taxable income.
— 7 percent on taxable income between $21,251 and $100,000.
— 7.75 percent on taxable income between $100,001 and $200,000.
— 8 percent on taxable income of $200,001 and above.
North Carolina individual income tax returns are due on April 15 or the next business day if that date falls on a weekend or holiday.
The state sales tax is 4.5 percent. It is scheduled to go to 4.75 percent on Oct. 1, 2009.
Most taxable sales or purchases are also subject to the state tax as well as the 2.5 percent local tax rate levied by all counties.
The North Carolina Department of Revenue offers a complete list of tax rates for its counties and cities.
North Carolina also has a use tax, which applies to all out-of-state purchases of tangible personal property that would be subject to the sales tax if purchased in North Carolina. In these cases, taxpayers should file Form E-554.
Personal and real property taxes
The property tax in North Carolina is a locally assessed tax, collected by the counties. The state Department of Revenue does not send property tax bills or collect property taxes.
The three main elements of the property tax system in North Carolina are real property, motor vehicles and personal property (inventories and household personal property are exempt).
For almost all the segments of the property tax, Jan. 1 is the tax lien date. In other words, an individual owning property as of that date is liable for property taxes in the county where the property is located.
Taxpayers having tangible personal property in North Carolina must file an annual Schedule B-Personal Property tax return with each county where the property is owned by Jan. 31. The amount reported must be the fair market value and is based on assessed values in $100 increments.
Listings of the state’s property tax rates since 1998 through fiscal year 2008-09 are available on the North Carolina Department of Revenue Web site.
North Carolina offers various property tax exclusions, including tax breaks for the elderly, veterans and the disabled.
For further information regarding property tax, contact your local county assessor.
Inheritance and estate taxes
North Carolina does not collect an inheritance tax.
The North Carolina estate tax is tied to the federal collection system. However, the General Assembly did not adopt either the federal phase-out or termination of the estate tax credit. Therefore, the North Carolina estate tax is equal to the state death tax credit for estates as it existed prior to 2002.
Other North Carolina tax facts
North Carolina taxpayers can check the status of their state returns online.
Taxpayers can have their state refund money directly deposited into a bank account (if the return was electronically filed), sent as a paper check, credited to their estimated income tax account or credited as a contribution to the state’s Wildlife Fund.
The North Carolina Department of Revenue has instituted Project Collect Tax, an initiative to boost state tax compliance. The project focuses on the collection of delinquent tax debts over 90 days old. Every delinquent North Carolina taxpayer now receives a special notice informing them of the amount of their debt and allowing the delinquent account holder 30 days to pay in full or set up a payment plan.