North Carolina is mixed when it comes to taxes compared to other states in the U.S.and is in a group of 10 other states where residents face about the same tax burden, according to Kiplinger.
The designation comes from Kiplinger’s tax map for 2019, which was updated in October. The map divides states up into five categories for taxes: most tax-friendly, tax-friendly, mixed, not tax-friendly and, finally, least tax-friendly.
According to the map, the most tax-friendly state in the country is Wyoming, where there is no state income tax and a 0 percent effective income tax rate. Two other states out West — Nevada and Alaska — along with Tennessee and Florida rounded out the top five spots for the most tax-friendly states.
Here’s what Kiplinger said about North Carolina’s tax picture:
- Sales tax: The state has a 4.75 percent state sales tax, however localities can add as much as 2.75 percent. The average combined rate is 6.97 percent, according to the Tax Foundation. Groceries are not taxed by the state, but a 2 percent local tax is levied.
- Effective tax rate: North Carolina has a flat tax, which is 5.49 percent for both single and joint filers.
- Property taxes: Property tax averages about $894 per $100,000 of assessed home value.
- Vehicle taxes: A 3 percent tax is due for registration when a title is transferred. Annual vehicle property tax is determined by multiplying the combined county and municipal tax rate by the county tax appraisal of the vehicle.
- Inheritance and estate taxes: There is no inheritance or estate tax in North Carolina.
See Kiplinger’s full tax profile for North Carolina here.
Illinois topped Kiplinger’s list as the least tax-friendliest state in the nation. Along with Wisconsin, the tri-state area consisting of Connecticut, New York and New Jersey, made up the remainder of the top five least-friendliest states in the U.S.
Kiplinger used tax data from each state’s tax agency, the U.S. Census and other sources to compare each state’s tax burden. The tax-friendliness was calculated based on the sum of income, sales and property tax that a sample filer paid in each state. The full methodology and the profile of the sample filers are found on Kiplinger’s website.
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