Claim: “The best incentive for new jobs in North Carolina ... is not to have the highest sales tax, the highest corporate tax and the highest income tax in the Southeast, which is what we have right now.”
Speaker: Pat McCrory
Context: McCrory compares North Carolina’s tax rates to its peers as part of his pitch to make the state more competitive and business-friendly. We will look at just the tax rates here.
McCrory defines the southeast as Georgia, South Carolina, North Carolina, Tennessee, Florida and Virginia. An ad the Republican Governors Association is running in support of McCrory makes similar claims about the state’s business climate for the South.
For the sake of our analysis, we took a broad definition of the Southeast. We looked at 14 states stretching west to Louisiana and Arkansas, south to Florida and north to Maryland and Delaware. And we used the Tax Foundation’s figures for each state.
Sales tax: North Carolina’s 4.75 percent statewide rate is the 10th highest in the region. The four states with lower rates: Louisiana, Georgia and Alabama at 4 percent; Delaware has no state sales tax.
Corporate tax: North Carolina’s 6.9 percent rate is fifth highest. The only states with greater rates: West Virginia, Louisiana, Maryland and Delaware.
Personal income tax: North Carolina’s 7.75 percent tax rate for the top bracket is the highest in the Southeast. The next highest states are Arkansas and South Carolina, tied at 7 percent.
A disclaimer: It’s difficult to make exact comparisons because each state’s rates are leveled differently, with differing income brackets and exemptions from sales tax for some purchases.
Ruling: McCrory uses a tighter definition and by his measure, he’s correct. But by a broader analysis at our regional competitors our measure, he gets it right one out of three times. Staff writer Austin Baird contributed to this report.