United States

North Carolina: Governor Announces Corporate Income Tax Rate Reduction Will Occur

Aug 08, 2016
From KPMG TaxWatch

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In 2013, legislation was enacted that reduced North Carolina’s then-current 6.9 percent corporate income tax rate to 6.0 percent for tax years beginning on or after January 1, 2014. The rate was further reduced to 5.0 percent for tax years beginning on or after January 1, 2015, and to 4.0 percent beginning in 2016. In 2015, House Bill 97 adopted a further rate reduction to 3.0 percent beginning on January 1 of any year when General Fund taxes collected in the preceding fiscal year ending June 30 exceeded $20,975,000,000. Per House Bill 97, the Secretary of Revenue must notify taxpayers if the rate decreases under this section.

On August 2, 2016, Governor McCrory announced that tax revenue collections were $21.3 billion for the fiscal year ending June 30. This is more than $300 million above the threshold for triggering a reduction. As such, it appears that North Carolina’s corporate income tax rate will be reduced from 4.0 percent to 3.0 percent beginning January 1, 2017. Please contact Nikki Emanuel at 704-335-5344 with questions.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.