Today the Tax Foundation released its annual State Business Tax Climate Index that highlights which states best structure their tax systems and provides a roadmap for improvement for others.
This year, North Carolina slipped to 11th on the list, given that the timing of this report grades states based on their tax status as of July 2021.
In 2013, North Carolina ranked an abysmal 44th amongst states. Following fiscally conservative actions by the General Assembly in 2013, the state rose to 11th by 2015 and has been ranked 10th or 11th since 2018.
This year was a smash for tax reform in North Carolina. Gov. Roy Cooper signed his first budget with sweeping tax reforms into law just one month ago.
Future indexes will capture North Carolina’s tax leadership. With the personal and corporate income tax cuts fully enacted, North Carolina would rank 5th overall. North Carolina would tie with South Dakota for 1st place for the corporate tax ranking. On the personal income side, North Carolina would take 4th place.
North Carolina continues to lead by example – and Americans are voting with their feet. More people moved to North Carolina than any other state this decade except Florida and Texas. With the new tax cuts enacted, North Carolina’s flourishing tax climate will continue to attract families, individuals, and businesses.
