NC  Tax Simplification and Fairness Act

Changes for businesses for tax years 2014 and after

On July 23, 2013 NC Governor Pat McCrory signed the recently passed tax revisions into law. The changes will take effect January 1, 2014 for tax years 2014 and beyond. Here are the highlights of what did and did not change (not an all-inclusive list):

CORPORATE TAXES (See separate list for changes to Individual taxes)

• Corporate tax rate drops from 6.9% for 2004-2013 to 6% in 2014 and to 5% in 2015. Further rate reductions will depend on whether tax revenue targets are met in 2016 and 2017.
• Tax credits for research & development are extended until 2016.
• Tax credits for film production will expire in 2015.
• Various other tax credits will be allowed to expire as scheduled under current law.

NO CHANGE FROM PREVIOUS LAW

• No change to state sales tax rate.
• Prescription drugs remain exempt from sales tax.No change to how food is taxed (sales tax) although some specialized bakery items.
•  No change to franchise tax calculation.lose their preferred tax rate status effective July 1, 2014.

OTHER TAXES

• Movie tickets and other amusements now subject to full sales tax rate instead of reduced privilege tax rate.
• Tax rate levied on electricity and piped natural gas increases from 3% to 7%.
• Changes made to various other sales tax categories (too numerous to list here but are to very specific sales).
• Back-to-school sales tax "holiday" is eliminated.
• State gasoline tax capped to 37.5 cents through June 30, 2015.