State Tax Guide

North Carolina State Taxes: A Simple Guide

North Carolina has a state income tax, plus statewide and local sales taxes and local property taxes. This guide explains the basics in plain, human language for individuals.

ℹī¸Important: This guide is a general overview. Tax rules, rates, and local details change over time. Always rely on official North Carolina sources or a tax professional for specific advice.

💰North Carolina state income tax

North Carolina taxes individual income under its own system, separate from federal rules. In general:

📋Residents with income above certain thresholds usually must file a North Carolina income tax return
📍Nonresidents may need to file if they have income from North Carolina sources
📝North Carolina defines taxable income, adjustments, and credits under its own law, which can differ from federal rules

📄 Typical filing: Most North Carolina residents will file a federal Form 1040 and a separate North Carolina return for the same tax year if they meet state filing requirements.

🛒Sales and use tax

North Carolina has a state sales tax, and counties can add local sales taxes on top of the state rate. The total sales tax you pay depends on where you make the purchase in the state.

→Many retail sales of goods are taxable; some items are exempt or taxed differently
→
If you buy taxable items from out of state or online and no tax is collected, you may owe use tax to North Carolina

đŸ’ŧ Business owners: If you run a business that sells taxable goods or services, you may have to collect and remit state and local sales tax.

🏠Property taxes

Property taxes in North Carolina are handled mainly by counties and local governments. They're based on the assessed value of real property like homes and land.

📊Homeowners receive property tax bills from their county
🏡Some taxpayers may qualify for relief or special programs, such as certain exemptions for a primary residence
đŸĢProperty taxes help fund local schools, public safety, and other services

📍 Local variation: Because property taxes are local, rates and available programs vary by county and municipality. Check with your local tax office for exact details.

🔗Putting North Carolina taxes together

A typical North Carolina resident may see several kinds of tax each year:

1ī¸âƒŖFederal income tax (Form 1040)
2ī¸âƒŖNorth Carolina state income tax
3ī¸âƒŖSales and use taxes on purchases
4ī¸âƒŖLocal property taxes if they own a home

📚 Build your foundation: Once you understand federal basics like taxable income and how to file your taxes, it becomes much easier to see how North Carolina's rules fit on top.

Related Guides

→ What is Form 1040?→ What is taxable income?→ How to file your taxes (simple)→ What is a tax return?← Back to all state tax guides

Estimate your tax refund

Calculate your federal and North Carolina state tax liability.

Calculate Your Refund→

This North Carolina guide is a general overview and does not cover every exception, credit, or local rule. Always consult current state and local guidance.