On June 28, 2017, the North Carolina General Assembly voted to override North Carolina Governor Roy Cooper’s veto of the budget bill for fiscal years 2017-2019, and enacted legislation that reduces the corporate income tax rate from 3% to 2.5% and reduces the personal income tax rate from 5.499% to 5.25% for taxable years beginning on or after January 1, 2019.
The legislation also lowers the franchise tax rate for S corporations by changing it to a flat $200 tax on the first $1 million of net worth and $1.50 for every $1,000 of net worth over $1 million, for taxable years beginning on or after January 1, 2019. In addition, the legislation increases the standard deduction for all personal income tax filers and changes the child tax credit to a child tax deduction.
The 1% privilege tax imposed under Article 5F of Chapter 105 of the General Statutes, which includes mill machinery and mill machinery parts and accessories, is repealed and a sales and use tax exemption is provided for the items.
