North Carolina tax policy puts state atop magazine’s business climate rankings

(The Center Square) – North Carolina was ranked No.1 for its business climate by Site Selection magazine for the second consecutive year.

The business-centered publication releases its annual Business Climate Rankings each November. The magazine evaluated states equally on its criteria and expert survey.

North Carolina was tied for the No.1 spot last year with Georgia, but the state topped the list for several years before. The magazine attributed North Carolina’s top ranking to its corporate tax rate.

“One of North Carolina’s competitive advantages for several years has been its 2.5% corporate tax rate – the lowest of the 44 states that levy such a tax,” Site Selection wrote.

The state’s other advantages include its regulations, supply-chain logistics, cost of doing business, economic incentives and workforce-training programs, the magazine said.

North Carolina Republicans have credited themselves for the ranking, saying their pro-business policies such as the low tax rate and relaxed regulations have contributed to the state’s positive business climate.

“Low taxes, low spending, and reasonable regulations ushered in a boom decade for North Carolina,” said Sen. Todd Johnson, R-Union, who co-chairs the Senate Commerce Committee. “When a formula is working, we should continue it, and that’s what North Carolina Republicans intend to do.”

Republicans have held the majority in the General Assembly for the past decade, but House Minority Robert Reives, D-Durham, said Wednesday the state had similar business tax rankings when Democrats last led the Legislature in 2010.

“Business rankings happen because of years of policy,” Reives said during House debate.

Lending Tree ranked North Carolina the best place in the country to start a small business last month, and CNBC has ranked North Carolina No. 2 on its list of top states for business.

The General Assembly passed a biennium budget this week that reduces the franchise tax base for corporations and phases out the corporate income tax over six years, beginning in 2025. It also makes expenses paid with Paycheck Protection Program loans tax-deductible, increasing the business-friendly atmosphere.

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