Corporate Income and Franchise Tax Rates
An income tax is levied on the net taxable income of all corporations chartered in North Carolina or doing business in North Carolina, unless they are specifically exempt from tax under G.S. 105-130.11. Net taxable income shall be the same as taxable income as defined in the Internal Revenue Code in effect for the income year for which the returns are to be filed, subject to the adjustments provided in G.S. 105-130.5.
To calculate your North Carolina tax liability, multiply your North Carolina taxable income by the tax rate.
| Tax Year | Tax Rate | Surtax Rate |
|---|---|---|
| 2025 | 2.25% | |
2019 through 2024 | 2.50% | |
| 2017 and 2018 | 3.00% | |
| 2016 | 4.00% | |
| 2015 | 5.00% |
Franchise Tax Rate for General Business Corporations
C Corporations:
Effective for taxable years beginning on or after January 1, 2025, and applicable to the calculation of franchise tax reported on the 2024 and later corporate tax return, the franchise tax rate is $1.50 per $1,000 of the corporation's tax base, with a maximum of $500 for the first $1,000,000 of its tax base and is applied as set forth in the law. The minimum franchise tax is $200.
For information on prior year franchise tax rates, please see the applicable tax year's Corporate Income, Franchise, and Insurance Tax Bulletins.
S Corporations:
Effective for tax years beginning on or after January 1, 2019, and applicable to the calculation of franchise tax reported on the 2018 and later corporate tax return, the franchise tax rate for S corporations is $200 for the first $1,000,000 of the corporation’s tax base and $1.50 per $1,000 of its tax base that exceeds $1,000,000 and is applied as set forth in the law. The minimum franchise tax is $200.
For information on prior year franchise tax rates, please see the applicable tax year's Corporate Income, Franchise, and Insurance Tax Bulletins.
Tax Rate for Holding Companies
The basis of the tax for a holding company as defined in G.S. 105-120.2 is the same as for general business corporations. The minimum franchise tax is also the same. However, the total maximum amount of franchise tax due by a holding company on its net worth tax base is capped at $150,000.
Any corporation that qualifies as a holding company for franchise tax should fill in the circle next to Line 1 on Page 1 of the appropriate form, CD-405 or CD-401S.