State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2021

North Carolina State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

North Carolina

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The Bottom Line
Flag of North Carolina

Mixed Tax Picture

With a flat 5.25% rate for the 2021 tax year, middle-class taxpayers in the Tar Heel State pay income taxes at a higher-than-average rate (but rates are going down starting in 2022). The state's average combined state and local sales tax rate is quite average, while property taxes are below average. When you add it all up, North Carolina is right in the middle when compared to the overall tax burden on middle-class families in other states.

Income Tax Range

For 2021, North Carolina has a flat rate of 5.25% of state taxable income. However, the rate is decreased to 4.99% for 2022, 4.75% for 2023, 4.6% for 2024, 4.5% for 2025, 4.25% for 2026, and 3.99% for 2027 and thereafter.

Sales Tax

4.75% state levy. Localities can add as much as 2.75%, and the average combined rate is 6.98%, according to the Tax Foundation.

Groceries: Exempt from state tax, but 2% local tax may apply
Clothing: Taxable
Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 3% highway-use tax
Prescription Drugs: Exempt

Real Property Taxes

In North Carolina, the median property tax rate is $773 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 36.35¢ per gallon.
Diesel: 36.35¢ per gallon.

Sin Taxes

Cigarettes: $0.45 per pack
Other tobacco products: 12.8% of the wholesale price
Vapor products: $0.05 per ml

Beer: $0.62 per gallon
Wine: $1 per gallon
Liquor: $14.58 per gallon
Liquor tax is an estimate by the Distilled Spirits Council of the United States and published by the Tax Foundation.

Annual Car Taxes and Fees

An annual vehicle property tax based on the car's age and value is imposed. County and municipal/district tax rates apply.

Estate and Inheritance Taxes

No estate or inheritance tax.