North Carolina personal income tax is slightly progressive, with four incremental brackets ranging from 6.0% to 8.25%. The base state sales tax is 4.25%. Most taxable sales or purchases are subject to the state tax as well as the 2.5% local tax rate levied by all counties, for a combined 6.75%. Mecklenburg County has an additional 0.5% local tax for public transportation, bringing sales taxes there to a total 7.25%. The total local rate of tax in Dare County is 3.5%, producing a combined state and local rate there of 7.75%. In addition, there is a 30.2¢ tax per gallon of gas, a 30¢ tax per pack of cigarettes, a 79¢ tax on wine, and a 48¢ tax on beer. There are also additional taxes levied against food and prepared foods, normally totaling 2% and 8% respectively.
The property tax in North Carolina is locally assessed and collected by the counties. The three main elements of the property tax system in North Carolina are real property, motor vehicles and personal property (inventories and household personal property are exempt). Estimated at 10.5% of income, North Carolina’s state/local tax burden percentage ranks 23rd highest nationally (taxpayers pay an average of $3,526 per-capita), just below the national average of 10.6%. North Carolina ranks 40th in the Tax Foundation’s State Business Tax Climate Index with neighboring states ranked as follows: Tennessee (18th), Georgia (19th), South Carolina (26th) and Virginia (13th).