Supporting balanced tax reforms that boost NC’s national and global competitiveness.
Making North Carolina the best place in the world to live, work, learn, play, and do business is no easy feat, but our state has made phenomenal strides over the last few years toward that goal. A driving factor behind these improvements has been the balanced business tax climate we have helped to build here in North Carolina.
The NC Chamber advocates for tax policy that meets five key principles we identified after conversations with our members: competitiveness, equity, efficiency, simplicity, and certainty. These fundamental principles ensure any tax modernization efforts we support will improve North Carolina’s overall business climate by accomplishing important objectives like streamlining burdensome regulations, improving outdated systems, and simplifying complicated policies.
Challenges and Solutions
Before 2013, our state had one of the least competitive tax climates in the nation: the 44th worst, according to the nonpartisan Tax Foundation. But after a series of Chamber-supported tax reforms reduced both the individual and corporate tax rates, our tax climate has improved by leaps and bounds. In fact, in 2021, North Carolina cracked the top 10 list for the first time in the Tax Foundation’s annual tax climate rankings. Additional research released by the Tax Foundation in early 2021 found that North Carolina businesses enjoy some of the lowest effective tax rates in the country*.
However, a number of potential roadblocks threaten to undermine the strong, predictable tax climate we have worked hard to build here in North Carolina. The continued imposition of a franchise tax that still acts as a disincentive for some businesses who may look to locate asset-rich investments in the state. The NC Chamber wants our tax rates, both personal and corporate, to be the most competitive. Right now, the biggest challenge to that is our franchise tax and we will continue to advocate for its elimination.
The NC Chamber and our allies succeeded in securing a number of additional tax reforms during the 2021 legislative session, including a reduced and simplified franchise tax that will lower costs and complications for many North Carolina businesses at tax time. After these reforms were enacted, the Tax Foundation conducted another analysis of our tax climate, finding that the new reforms, if fully phased in, would propel our state even further up the charts to the fifth best state for business taxes.
*Overall tax climate rankings derived from the Tax Foundation’s 2021 State Business Tax Climate Index and 2022 State Business Tax Climate Index; data on effective tax rates of NC businesses derived from the Tax Foundation’s Location Matters 2021: The State Costs of Doing Business study and supplementary North Carolina-focused white paper.
- View our 2023 Legislative Agenda to learn how the NC Chamber will continue to protect our state’s competitive tax climate this legislative session.
- Learn how the NC Chamber continued to strengthen and secure a business-friendly tax climate for NC job creators in the 2021-2022 edition of How They Voted.
Join the Effort
Help drive the NC Chamber’s efforts to ensure North Carolina’s tax climate remains attractive to job creators and investors. Add your voice to our growing NC Chamber member family today.