Since 2013, when state leaders began implementing a number of commonsense policy reforms to streamline our tax climate, North Carolina’s competitive tax standing has improved by leaps and bounds. Along with a reduced individual rate (not only important for families, but also for businesses taxed on their owner’s income, including many small and Main Street businesses in our state), our companies now benefit from a 3 percent corporate tax rate – the lowest in the country for any state that levies one. Taken together, these reforms have elevated North Carolina from the 44th to the 11th most competitive tax climate in the nation in the span of a few short years, according to the nonpartisan Tax Foundation.
The NC Chamber and our members have been among the staunchest proponents of these competitive reforms. That’s because we understand that a balanced, business-friendly tax climate serves to directly foster economic growth by encouraging new business investment. And the proof of this connection is showing up in the hard numbers. This past week, economists in state government reported that North Carolina is clearly operating in the black, with a projected budget surplus of about $322 million for the most recent six-month fiscal period. In other words, contrary to arguments that reduced individual and corporate tax rates would lead to less revenue generation for the state, we’re proving that an aggressive approach to pursuing key economic reforms combined with responsible spending and economic reinvestment strategies can act like a flywheel to support continued economic growth.
As legislators prepare to convene in Raleigh this week for the start of the long session, you can be sure that the NC Chamber advocacy team will be on hand to continue pursuing this bold strategy as part of your 2017 Jobs Agenda. Among the targeted tax reforms we will be working to advance are simplification of the franchise tax (the statewide tax on business property) and a full repeal of the mill machinery sales tax (an excise tax on a wide array of industrial components which serves as a duplicative tax burden on the manufacturers our state relies on for our high rates of economic productivity). With lawmakers focused on capitalizing on our state’s high growth potential in 2017, we will continue to update you on the Chamber’s efforts to keep our tax climate moving up the competitive leaderboard.
Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber