News & Insights

North Carolina Is Poised to Eliminate the Corporate Income Tax

Tax Development Nov 19, 2021

North Carolina Is Poised to Eliminate the Corporate Income Tax

North Carolina is poised to pass a compromise budget that would be the first state budget to be approved in the state since 2017. This current budget proposal, if approved, will cover the next two fiscal years ending June 30, 2023 and June 30, 2024. This budget incorporates months of negotiations in the Republican-led legislature. North Carolina will be the last state in the country to adopt a budget.

Highlights of the budget bill include:

  • Complete phase out of the 2.5% corporate income tax by tax years beginning after 2029, beginning with a decrease to 2.25% in 2025;
  • Gradual lowering of the personal income tax rate from 5.25% to 4.99% for 2022 and to 3.99% for tax years beginning after 2026;
  • Elimination of the two most burdensome of the three tax bases used to calculate the franchise tax on business assets;
  • Extension of the Historic Preservation Tax Credit through 2031; and
  • Historic $8 billion infrastructure investment plan.

Governor Roy Cooper signed the bill as presented, on November 19, 2021.


Mark L. Nachbar

Mary Bernard

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at