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.
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 rankings as we were rated the 10th most competitive state in country*.
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overall business climate by accomplishing important objectives like streamlining burdensome regulations, improving outdated systems, and simplifying complicated policies.
*Data derived from The Tax Foundation. https://taxfoundation.org/2021-state-business-tax-climate-index/
The Current Challenge
Predictability and certainty are the cornerstones that anchor North Carolina’s reputation as one of the best states in the nation for business; however, a number of potential roadblocks threaten to undermine the strong, predictable tax climate we have worked hard to build here in North Carolina. In 2021, major obstacles impacting job creators include audit and disallowance activity that is retroactively threatening the delivery of promised tax credits for investors in renewable energy development as well as an overly burdensome and complicated franchise tax that essentially acts as a double tax discouraging tangible business investments in the state.
The retroactive disallowance of Renewable Tax Energy Credits and the overly burdensome franchise tax both act to increase uncertainty, threatening the climate of predictability we have worked to create around tax issues in North Carolina. The NC Chamber is working toward resolutions that restore investor confidence in our tax credit programs as well as pursuing policies that reduce, cap, streamline, and ultimately eliminate the franchise tax, so we can strengthen our standing as a leading state on tax competitiveness.
Learn more about the NC Chamber’s plans to enhance North Carolina’s business tax climate in our 2021 Legislative Agenda.