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North Carolina Considers Reducing Sales Tax

  • Mar 26, 2013 | Gail Cole

 North Carolina Bill Would Tax Alteration Services.

North Carolina Governor Pat McCrory (R) does not want to raise taxes. In fact, in his FY 2014-15 Budget Announcement, the governor told listeners, “Now is the wrong time to raise taxes.” His administration is “not recommending an income tax increase, a sales tax increase, [or] a gas increase” (Minute 10--11).

The North Carolina Senate may go a step farther. SB 394, introduced by Senator Daniel Clodfelter (D), would reduce the sales tax rate from 4.75% to 4.5% and broaden the sales tax base to include many services not currently taxed. It also seeks to lower the corporate income tax from 6.9% to 6%, and establish a flat personal income tax rate of 6%.

The bill is “an act to adopt a bipartisan tax reform plan to promote economic development in North Carolina by establishing a sound state tax structure that revises the existing structure on a revenue-neutral basis, lowers all major tax rates, taxes all income at the same rate, and makes the structure simpler, fairer, and consistent with the modern economy… .”

Whether or not it will garner bipartisan support remains to be seen. The bill passed its first reading and has been referred to the Senate Finance Committee.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.