North Carolina State Tax Guide

North Carolina state tax rates and rules for income, sales, property, fuel, cigarette, and other taxes that impact residents.

picture of North Carolina state flag on flag pole against blue sky
(Image credit: Getty Images)

North Carolina state tax: Overivew

North Carolina state tax includes a flat personal income tax rate of 4.5%. The state's sales taxes are generally considered to be near the national average and the state's property taxes are relatively low. 

North Carolina, which doesn't have estate or inheritance taxes also doesn't tax groceries, although some localities do.

[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.] 

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

North Carolina income tax

An aerial view of the profile of Asheville, North Carolina

(Image credit: Getty Images)

North Carolina has a flat rate of 4.5% personal income tax rate. That rate is currently scheduled to drop over the next few years until it reaches 3.99 in 2027.

  • Social Security: Not taxable
  • Pensions: Taxable
  • 401(k) and IRA Distributions: Taxable

North Carolina sales tax

Still life of a small shopping cart with $1 USD bills

(Image credit: Getty Images)

North Carolina's state sales tax is 4.75%. According to the Tax Foundation, localities can add as much as 2.75%, and the average combined rate is 6.97%.

  • 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

What is the property tax rate in North Carolina?

little model house on a table

(Image credit: Getty Images)

In North Carolina, property taxes paid are generally about 0.82% of assessed home value, according to the Tax Foundation.

North Carolina Property Tax Breaks for Retirees

North Carolina offers a homestead property tax exemption for eligible residents. The state excludes from property tax, a portion of the appraised value of a permanent residence. The owners must occupy the home and be 65 or older or totally and permanently disabled to qualify. Income limits also apply.

North Carolina gas tax 

rendering of a yellow car against a yellow background

(Image credit: Getty Images)

Gasoline: $0.35 per gallon

Diesel: $0.35 per gallon

Source: The Sales Tax Handbook

North Carolina taxes on alcohol and tobacco

North Carolina tobacco taxes

Swipe to scroll horizontally
ProductTax Amount
Cigarettes$0.45 per pack of 20
Other tobacco products12.8% of the wholesale price (no more than $0.30 per cigar)
Vapor products$0.05 per ml

Source: The Sales Tax Handbook

North Carolina alcohol taxes

Swipe to scroll horizontally
ProductTax Amount
Beer$0.62 per gallon
Wine$1 per gallon
Liquorstate controlled

Source: The Sales Tax Handbook

North Carolina estate and inheritance taxes

There is no estate or inheritance tax in North Carolina.

Related Content

Kelley R. Taylor
Senior Tax Editor,

As the senior tax editor at, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.