Taxes on Corporations Slashed Even More In New Year
If you are a multi-million dollar corporation in North Carolina, life just got a little easier starting on January 1st. The corporate tax rate was reduced by 16%, bringing the new rate to just 5%. The change is due to the reckless ‘tax reform’ plan passed in 2013, which spread out the reductions over a few years. From the Triangle Business Journal article,
Beginning Jan. 1, North Carolina corporations will see another tax benefit as the corporate income tax is reduced to 5 percent.
The reduction is a result of tax overhaul passed in 2013, but which takes effect over three years.
The corporate tax rate was reduced from 6 percent, and could potentially come down even farther if net general tax collections in the year ending June 30 exceed $20.2 billion.
Individuals will see income tax reduced to 5.75 percent from 5.8 percent. Although that drop isn't as much proportionately as the corporate income tax, individuals saw a bigger benefit last year. North Carolina had a three-tier tax system in which the top bracket paid 7.75 percent to the state and the lowest bracket paid 6 percent. The General Assembly compressed that system to one that taxes individual income at 5.8 percent across the board this year and 5.75 percent in 2015.
To make up for lost revenue from income tax, the state broadened the sales tax base, most notably to include entertainment. So, for example, going to the movies now costs a bit more because it includes a sales tax, something that went into effect on the first of 2014.