North Carolina

Sales Tax

  • Statewide: 4.75%
  • Counties can levy an additional sales tax of no more than 2.75%.
  • Current average sales tax (with local taxes included): 6.97%
  • Common Exceptions at State Level:
    • Prescription Medicine: Exempt
    • Unprepared Foods: Exempt at the state level, but most counties levy a tax of 2%
    • Electricity: 7%
  • Vehicle Tax: 3%
  • Gasoline Tax: 59.05 cents/gallon (Includes all state, local and federal taxes)
  • Diesel Fuel Tax: 65.05 cents/gallon (Includes all state, local and federal taxes)
  • Some counties level an additional .5% transit tax. Motor vehicles are exempt from sales tax but pay a 3% highway use tax at time of purchase.


Personal Income Tax

  • Personal Income Tax Rate: 4.5% 
  • Standard deduction: Single Filing Status: $12,750. Married Filing Jointly: $25,500
  • Personal Exemption Allowance: None
  • Itemized Deductions Allowed?: Yes, if itemized on federal return. Differ from federal itemized deductions and subject to limitations.
  • Retirement Income
    • Social Security: Exempt
    • IRAs: Taxable at ordinary income tax rates*
    • 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates
    • Private pensions: Taxable at ordinary income tax rates
    • Public Pensions: Taxable at ordinary income tax rates*
  • Military Pay
    • Active Duty Pay: Taxable to the extent included in federal Adjusted Gross Income
    • Military Retirement Pay: Exempt if servicemember served 20 years or was medically retired. Includes USPHS and NOAA Commissioned Corps retirees. Retroactive to 2021.
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt

Income tax comments: *May be excluded from taxation if had five years active duty before Aug. 12, 1989. (Bailey settlement agreement)


Property Tax

  • Local municipalities average .73% of the property's assessed value.
  • Calculation of assessed value: 100% of fair market value; reappraised at least every eight years.
  • Relief programs for:
    • 65 and Over or Disabled: Excludes greater of first $25,000 or 50% of appraised value. Income cannot exceed $6,700.
    • Disabled Veterans or Surviving Spouses: Excludes up to $45,000 of appraised value if 100% service-connected disability; no income requirements.
    • Circuit Break Property Tax Deferment: If 65 or disabled and limited income, annual tax is limited to 4% or 5% of income up to $55,050, though taxes over limit are only deferred.
  • Personal Property Tax: Yes. Rates and exemptions vary.


Inheritance & Estate Taxes: None


Department of Revenue website:

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