What Changes Can North Carolina Taxpayers Expect in 2023? | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Paige Terryberry.

    The 2021 long session brought North Carolina a "First in Freedom" budget, with pro-growth tax cuts which will continue to reward taxpayers in 2023 and beyond. The 2022 short-session budget, signed into law in July, brought additional changes for North Carolina families.

    See below for personal, business, and sales tax changes to expect in 2023.

    Personal:

  • Your personal income tax rate will fall from 4.99% of your income above the standard deduction to 4.75%. In future years, savings will grow as the personal income tax decreases to 3.99% after 2026.
  • The standard deduction and child tax credit changes from the 2021 session will continue to benefit taxpayers this year and perpetually unless another legislative session changes them.

    Business:

  • Though the corporate income tax rate is still 2.5% this year, the rate is scheduled to phase out to 0% by 2030, beginning with the decrease scheduled for 2025.
  • Beginning with taxes filed in 2023, North Carolina's franchise tax base will be simplified for taxes reported in 2022. The new law will reduce business liability by requiring businesses to calculate their tax liability under one base instead of three. In prior years, North Carolina's franchise tax was levied on the largest of these three options: the company's net worth, 55% of the real property in the state, and the business's total tangible property investment in the state. With the new law, businesses will only calculate their franchise tax on their net worth. Although the franchise tax is still harmful and redundant, this action reduces the burden on businesses.

    Sales:

  • The state sales tax rate will not change from 4.75%. Five North Carolina counties put local tax increases on the ballot during the recent elections. Notably, none succeeded.
  • Sales to interstate air and ground couriers are exempt from the state sales tax effective July 1, 2022, according to the latest budget.
  • Beginning this fiscal year that began July 1, lawmakers will divert 2% of the state's sales tax revenue to the Highway Fund. This action muddles the user-pays principle historically used for transportation funding via the gas tax. The dollar amount of the sales tax revenue transfer is, however, calculated based on estimated vehicle-related purchases. Though this change does not directly affect your sales tax rates, it could have future implications for sales tax revenue and rates.
  • The motor fuels tax (the gas tax) is calculated each year based on a formula tied to the state's population change and energy inflation. In 2023, the gas tax will be 40.5 cents per gallon, an upward change from 2022's 38.5 cents per gallon.

Go Back


Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )




FLASHBACK: Cooper Is Steering North Carolina Towards Electricity Blackouts John Locke Foundation Guest Editorial, Editorials, Op-Ed & Politics Attorney General Declines to Prosecute Mark Meadows for Voting Fraud


HbAD0

Latest Op-Ed & Politics

Locals and Groundhog Day enthusiasts alike were caught off-guard today, as the eponymous groundhog, Punxsutawney Phil, emerged from his burrow and declared to the crowd gathered at Gobbler's Knob that there was a cache of documents marked "Classified" in his underground home.
A Catholic pro-life activist facing 11 years in prison for allegedly violating a federal law prohibiting people from blocking others from entering an abortion clinic was acquitted on Monday following a week-long trial.
Chicago Mayor Lori Lightfoot was slammed after video showed her dancing in the street in Chicago’s Lunar New Year parade Sunday.
Several users of the remarkable software ChatGPT are reporting an apparent glitch that occurs whenever someone asks the AI to say something nice about Donald Trump.
A Senate Democrat is joining Republican colleagues in calling for an investigation into the suspected Chinese spy balloon currently hovering over the United States.
County boards of elections in North Carolina regularly remove voter registrations of people whom they confirm have died or moved out of the county
Federal prosecutors requested that former FTX CEO Sam Bankman-Fried become subject to more restrictions during his pretrial release after he allegedly tried to tamper with a witness through the encrypted messaging platform Signal.

HbAD1

The N.C. Court of Appeals will decide in Zander v. Orange County whether the county must refund millions of dollars in school impact fees collected since 2009.
Secretary of State Antony Blinken reportedly told China’s Foreign Minister Wang Yi in a call on Friday that “the presence” of a suspected Chinese spy balloon in “U.S. airspace is a clear violation of U.S. sovereignty and international law.”
Local progressive and Anitfa member Declan Johnson has started to question his commitment to the communist revolution over concerns about a potential lack of gluten-free bread lines.
Young workers in Western nations are leaving their jobs at increasing levels over a desire to work for companies they believe are committed to fighting climate change.
Headlines detailing pro-union pushes at Amazon, Starbucks, and other big companies, coupled with President Biden’s vow to be the “most pro-union President leading the most pro-union administration in American history,” may lead us to think union membership is seeing a resurgence.
A suicide bomber targeted police at a crowded mosque in Peshawar, Pakistan, Monday, killing at least 47 people and injuring more than 150 others.
According to several sources, CNN has reached out to President Joe Biden for a consultation on how to make up stories and still escape being branded as deceptive.
Rep. Adam Schiff (D-CA), who was recently booted off the House Intelligence Committee, faced scrutiny during an interview on Sunday over past examples of him allegedly politicizing intelligence information for partisan gain.
Rep. Greg Murphy, M.D. (NC-03) released the following statement after President Biden’s State of the Union address.

HbAD2

 
Back to Top