In its report on the 18 states that passed tax relief in 2013, ALEC showcases North Carolina. ALEC says the reforms passed by the legislature and signed by the governor are “among the most significant tax relief any state has passed in the last decade.” Awesome!

In mid-July, after months of debate and deliberation, North Carolina passed monumental tax reform. The bill had broad, far-reaching effects that immediately improved the state’s competitiveness and put it on the track for higher economic growth. In general, the plan consisted of the following:
Replaced 3-tiered personal income tax structure with a modified flat tax.

Lowered the top marginal rate of the personal income tax (from 7.75 percent down to 5.8 percent in 2014, and then 5.75 percent in 2015)

Reduced the personal income tax across all income brackets

Lowered the corporate income tax rate (from 6.9 percent down to 6 percent in 2014, 5 percent in 2015, and the possibility of falling to 4 percent in 2016 and to 3 percent in 2017, depending on whether revenue growth targets are achieved)

Eliminated the state’s death tax;

Broadened the sales tax base

Eliminated multiple gross receipts franchise taxes, privilege taxes, and preferential sales tax rates.

In all, the reform bill cuts taxes more than $500 million in the first two years alone, and more than $650 million a year by the 2017-2018 fiscal year.21 Without question, the reforms are among the most significant tax relief any state has passed in the last decade.