Prudent & Equitable Taxes

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LYNX rail line, light rail, Charlotte Chamber, Charlotte Chamber of Commerce, Charlotte, Charlotte NC, Charlotte North Carolina, Charlotte Business, Charlotte Relocation, Moving to Charlotte, Charlotte Information, Charlotte Calendar of Events, Charlotte Events, Chamber Events, Queen City, Charlotte Business Leaders, Charlotte Community, Charlotte Chamber Membership, Economic Development, Things to Do in Charlotte, Maps of Charlotte, Relocating to Charlotte, Visiting Charlotte, Charlote, Charltote, Sharlotte, Sharlote, econdev, Charlotte Business, Charlotte real estate, Charlotte buildings, Charlotte incentives, Mecklenburg, Mecklenburg County, Meck, Meck County, NC incentives, North Carolina Incentives, Charlotte USA, Charlotte Regional Partnership, Taxes, Tax, Cost of living, quality of life, piedmont, manufacturing, industry, headquarters, city, metro, msa, metropolitan statistical area, combined statistical area, csa, transportation, doing business in charlotte, relocating, utilities, energy, energy sector, business in charlotte, research, charlotte research, airport, charlotte douglas airport, international airport, workforce, Charlotte workforce, Charlotte workforce developmentTax payments in Charlotte and Mecklenburg County provide a good rate of return on investment. Excellent fiscal management by local government assures a high level of public services at a reasonable tax rate. The best municipal bond credit ratings obtainable are consistently maintained, and cash flow accumulations are managed for optimum interest earnings, thereby avoiding additional taxes. These measures save Charlotte-Mecklenburg taxpayers millions of dollars annually.

In addition, Charlotte and Mecklenburg County offer a comparatively uncomplicated system of taxation. Because the city and county jointly operate one tax department, taxpayers are only subject to a single payment. Charlotte has the 17th lowest residential property tax rates compared to the largest city in each state.

Reasonable rates, as well as equitable assessment, occur at a statewide level. Figures from the U.S. Census Bureau show the state and local per capita tax burden in North Carolina to be well below the national average.

 

Equitable Taxes

Property Tax (Real)

Real property is assessed at 100 percent of the fair market value. Real property is assessed every four to eight years. Rental property is taxed at its full assessment. The tax rate per $100 for past years is as follows.  Both business and individuals are taxed at the same rate.

 

Rate per $100 Valuation

Year

Charlotte

Unincorporated Area

2013

1.2844

1.0094

2012

1.2536

0.9859

2011

1.2536

1.0032

2010

1.2973

1.0433

2009

1.2973

1.0175


Property located within the corporate limits of the city of Charlotte is taxed by both city and county. A police service district tax of $.1937 is applied to the unincorporated area of the county.  There is no state of North Carolina tangible property tax. An additional tax ranging from .0168 to .0668 cents per $100 is levied on property within the five Municipal Service Districts. These districts are created to promote economic development through services, programs and advocacy. The revenues generated by the Municipal Service District assessment will be spent on enhancement programs within the district itself. Three of the five districts are in the Center City area; the other two are located in the SouthEnd corridor and University City area.


Approved pollution abatement and recycling equipment are exempt from taxation under the property tax laws.


Property Tax (Personal)

 

Residential Property Tax Rates
In Selected Cities, 2012

 


Rank


City

Effective Tax Rate Per $100

 

1

Virginia Beach, VA

0.75

 

2

Boston, MA

1.06

 

3

Minneapolis, MN

1.28

 

4

Charlotte, NC

1.30

 

5

Jacksonville, FL

1.73

 

6

Portland, OR

2.11

 

7

Houston, TX

2.52

 

8

Atlanta, GA

3.37

 

9

Bridgeport, CT

3.87

 

10

Albuquerque, NM

4.32

 

11

Columbus, OH

5.01

 

12

Philadelphia, PA

8.26

 

 

U.S. Average

5.45

 

Source: U.S. Census Bureau, Statistical Abstract of the United States, 2012. Note: Effective tax rate adjusted for assessment year and rate.

Personal property is taxed at the same rate as real property. The only personal property taxed for individuals are motor vehicles, boats, airplanes and trailers.  Business personal property includes all tangible properties, which include vehicles and equipment, but excludes inventories.  These are listed by the owner and assessed annually.

Furniture, fixtures, machinery, equipment, computers and off-the-shelf computer software are initially listed in detail at full cost installed. Custom software is not taxed. After the initial listing, the taxpayer lists as of Jan. 1 each year only the additions to or deletions from this property. Depreciation is applied from county schedules. Minimum value of useful property is 20 percent of the original cost.

Motor vehicles, trailers and airplanes are listed as of Jan. 1 each year. Appraisals are made from National Used Car & Truck Valuation guides and local market data. Airplane appraisals are made from publications on used aircraft. A special tax is also levied on personal property located in the five Municipal Service Districts.

 

Income Tax (Corporate)
North Carolina corporations and other companies doing business in the state are subject to state income tax. The corporate income tax rate is 6 percent, effective January 2014, dropping to 5 percent in 2015 and as low as 3 percent in 2017 if state revenue goals are met.

 

Estimated State and Local Tax Paid by a Family of Three in Selected Cities 2012

City

$25,000 Income (gross)

$50,000 Income (gross)

$75,000 Income (gross)

$100,000 Income (gross)

$150,000 Income (gross)

Atlanta, GA

3,270

4,535

7,040

9,837

13,969

Charlotte, NC

3,353

5,311

7,738

10,868

15,374

Denver, CO

2,815

3,559

5,426

7,956

10,709

Houston, TX

2,497

3,003

4,210

5,586

6,588

Jacksonville, FL

2,656

2,445

3,330

4,532

5,597

Los Angeles, CA

2,757

5,278

7,574

10,263

15,497

Memphis, TN

2,740

2,959

4,182

5,515

6,439

New York City, NY

2,950

5,169

8,173

11,663

18,186

Philadelphia, PA

4,109

6,859

9,310

12,130

16,349

Portland, OR

2,612

5,235

8,082

11,430

16,376

U.S. Average

$2,720

$4,364

$6,392

$8,757

$12,165

Source: U.S. Census Bureau, Statistical Abstract of the United States, 2012. Note: Includes state and local sales, income, auto and real estate taxes.

 

Income Tax (Personal)
All residents of the state of North Carolina and some non-residents are subject to personal income taxes. For tax year 2013 and prior, North Carolina’s individual income tax was based on the taxpayer’s taxable income as determined under the Internal Revenue Code. There were three individual income tax rates of 6 percent, 7 percent and 7.75% percent based on filing status and income levels.

In 2013, the state of North Carolina passed a flat tax rate for everyone, regardless of income. For tax year 2014, the income tax rate is 5.8 percent. For tax year 2015, the income tax rate is 5.75 percent.

If your gross income is equal to or more than the amount set by the state for your filing status, you must file a North Carolina income tax return. Individual income tax returns are due April 15. If you file for an extension, your return is due October 15.

North Carolina taxable income is first determined from taxable income for federal income tax purposes. Additions to this taxable income include:

A. Interest from obligations of states other than North Carolina.

B. State, local and foreign income tax deducted on the federal return.


C. The standard deduction and personal exemption inflation adjustment.


D. Any amount allowed as a deduction from federal gross income that is taxed by a separate tax.

E. Lump-sum distributions from a pension or profit-sharing plan.

F. Income from domestic production activities.


For tax years beginning on or after Jan. 1, 2012, the starting point for the computation of North Carolina taxable income is your federal adjusted gross income.  Because the starting point for determining North Carolina taxable income is federal adjusted gross income, you must complete your federal return before you begin your North Carolina return.

For more information on North Carolina personal income tax, please visit dor.state.nc.us/taxes/individual.

Franchise Tax (Business Corporation Tax)
All corporations operating in the state are levied a franchise tax at the rate of $1.50 per $1,000 of the largest of three alternative bases:

A. The amount of the capital stock, surplus and undivided profits apportionable to the state.

B. Fifty-five percent of appraised value of property in the state subject to local taxation.

C. The book value of real and tangible personal property in the state less any debt outstanding which was created to acquire or improve real property in the state. Book value may be computed by use of the same depreciation methods as are permitted for federal income tax purposes.

The minimum franchise tax is $35. Franchise tax and income tax are reported on the same return.

 

Business License Tax
Occupational license taxes are levied by the county and city government on a variety of businesses. These fees vary with the type of business and volume of sales. All are quite reasonable. A schedule of fees may be obtained from the City-County Collector of Revenue.

Unemployment Insurance
Though not a tax, most states require an insurance fee be paid on a portion of taxable wages. This fee varies with each business based on its history of unemployment claims. North Carolina requires a fee of 1.2 percent of the first $21,400 in wages paid per employee for new firms operating within the state. Existing firms are charged a rate from 0.072 percent to 6.912 percent of the first $21,400 in taxable wages; the average rate is 1.2 percent.

Sales and Use Tax
A 4.25 percent state tax plus a 3.0 percent local tax makes up the 7.25 percent Mecklenburg County sales tax. An additional tax of 1 percent on prepared food purchases and 8 percent on hotel rooms occupancy rates are collected locally. Qualifying foods are taxed at a rate of 2 percent. The sales tax on boats, planes and railway cars is 3 percent with a $1,500 maximum tax on each item. Motor vehicle sales are covered under the highway use tax. North Carolina levies a tax on the privilege of using the highway at the rate of 3 percent of the retail value of a motor vehicle. The tax is at least $40, but cannot exceed $1,000 for commercial vehicles.

A 7.25 percent use tax is charged on purchases made out of state; however, mill machinery, parts and accessories used in the manufacturing process are charged only 1 percent. The maximum tax on a single article of manufacturing machinery or equipment is $80. Raw materials, containers, labels, packaging and shipping materials are exempt from taxation.

Sales of machinery and equipment to be located and used in a major data center are exempt from sales and use tax but are subject to privilege tax.  Sales of electricity purchased by manufacturers to operate their facilities are exempt from sales and use tax. Fuel purchased by manufacturers are exempt from privilege license tax.


Motor Vehicle Registration
The state’s annual registration license fee is $28 per private passenger vehicle and $28 per private truck less than 4,000 pounds. In 2013, North Carolina began collecting vehicle property taxes along with registration renewal fees. For more information on the Tax and Tag Together program, please visit ncdot.gov.

For more information:
Office of the Tax Collector
Bob Walton Plaza,
700 E. Stonewall St., Charlotte, NC 28202
704.336.7600

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