North Carolina State Tax Laws

A tax form

Taxes exist on both the federal and state level. State taxation can then be broken down further into local government taxes for different towns and cities. Each state taxes differently, and it's important to understand the different regulations and laws for your own state. For example, the state of North Carolina has four tax brackets. These brackets have rates between 6 percent at the lowest and 8 percent at the highest. To understand the process of taxes in North Carolina, you must first understand certain tax laws of the state.

Personal Income Tax Law

North Carolina uses four different tax brackets to tax your income, depending on whether you are a single taxpayer or if you are a married taxpayer and filing joint returns. If you are a single taxpayer, the brackets are broken into the following four categories: You pay 6 percent on the first $12,750 of taxable income, 7 percent on taxable income from $12,751 to $60,000, 7.75 percent on taxable income from $60,001 to $120,000 and 8 percent on taxable income of $120,001 and greater. If you are filing joint returns as a married taxpayer in North Carolina, the brackets are broken into the following four categories: You pay 6 percent on the first $21,150, 7 percent on taxable income from $21,151 to $100,000, 7.75 percent on taxable income from $100,001 to $200,000, and 8 percent on taxable income of $200,001 and greater.

Sales Tax Laws

Currently, the state sales tax is 4.75 percent, and the majority of counties set their sales tax rate at 2.5 percent. Most purchases include both this state tax as well as the tax of your local county. Further, North Carolina has a "use tax" within the sales tax that is applied to out-of-state purchases of tangible personal property that would have been subject to the North Carolina tax rates if it had been purchased in state.

Property Tax

Property tax is collected by individual counties and is thus considered a local tax. Property tax is broken into the following three categories: real property, motor vehicles and personal property excluding inventories and household personal property. In North Carolina, all property you own on Jan. 1 is liable for property taxes in your county for that year. You must file a Schedule B-Personal Property tax with your county by Jan. 31.

References

• North Carolina Department of Revenue: Home