$400 Million Surplus Could Trigger Corporate Tax Rate Reduction
- May 07, 2015
North Carolina state officials have announced a projected $400 million revenue surplus for the current fiscal year. The anticipated surplus is mainly due to higher income tax payments and lower refunds compared to last year. The expected surplus will likely trigger a 1% reduction in the North Carolina corporate income tax rate for tax year 2016. As part of the 2013 tax legislation, the General Assembly enacted provisional rate cuts that would go into effect if certain revenue targets were met. North Carolina’s corporate income tax rate is currently 5%. If general fund tax revenue reaches $20.2 billion for the current fiscal year, the corporate income tax rate will drop to 4%. Whether the reduction will occur will not be known until the end of the current fiscal year on June 30. A further 1% reduction would take effect beginning in tax year 2017 if revenue targets for fiscal year 2016 are met.