North Carolina LLC Taxes

With a temperate climate and easy access to natural areas, North Carolina is a popular place in which to live and start a business. Yet, as more business owners choose to launch their ventures within this state, many may find it challenging to understand the business taxes involved. 

Regardless of the size of your business, if you operate a limited liability company (LLC) in North Carolina, you’ll need to stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your North Carolina LLC.

Recommended: Schedule a free consultation with an accountant to stay on top of your taxes. 

North Carolina LLC Taxes Owed

LLCs benefit from pass-through taxation, which means the business’s profits pass through to its members’ individual tax returns. As a result, your LLC itself doesn’t pay taxes to the federal government or the state of North Carolina. Instead, LLC owners must pay taxes on the income they earn from the LLC. 

In North Carolina, LLC owners can expect to pay the following taxes:

Federal Taxes

Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.

Federal Self-Employment Taxes

It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%. 

Federal Income Taxes

Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year.

North Carolina State Taxes

Each state has its own laws that dictate how it taxes individuals and businesses. Below you’ll find several state-level taxes that likely will impact your North Carolina LLC.

North Carolina Income Taxes

The state income tax rate in North Carolina is 4.99%. That puts North Carolina near the lower end of state income tax rates when compared to the rest of the country.

North Carolina Sales and Use Tax

North Carolina has a state sales tax rate of 4.75%. However, that rate may increase based on your business’s location within the state. North Carolina counties and cities can impose their own additional sales taxes. The average local sales tax rate in the state is 2.23% so make sure to check if your area has a local sales tax.

For more information on state and local sales taxes, visit the North Carolina Department of Revenue website.

Register for a Sales Tax License in North Carolina

If your business sells taxable goods or services, you must register for a sales tax license with the North Carolina Department of Revenue.

Additional State Taxes

The North Carolina Department of Revenue oversees the collection of various state-specific taxes businesses may have to pay, depending on their location, industry, and number of employees. Some examples of these additional taxes include:

  • Alcoholic Beverages Tax
  • Motor Carrier Tax
  • Motor Fuels Tax
  • Privilege License Tax
  • Tobacco Products Tax

To learn more, visit the Taxes & Forms page on the North Carolina Department of Revenue website.

North Carolina Local Taxes

Greensboro's local laws and ordinances may differ greatly from those in Charlotte. Regardless of where you live in North Carolina, we recommend you check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.

North Carolina LLC Compliance

You must obey North Carolina’s state and local laws in order to maintain your business in good standing. While LLCs technically don’t file taxes with the state, North Carolina businesses must still file an annual report each year.

North Carolina LLC Annual Report

All LLCs in North Carolina must file an annual report with the Secretary of State each year. You can do this by mail or online, and the filing fee is $200. We recommend you file online because filing by mail involves many more steps and can be quite complicated.

Annual reports are due on April 15 each year, but you can file as early as January 1. Your first annual report is due by April 15 in the year after the state approves your LLC. If you miss this deadline, the state encourages you to file as soon as possible because there’s no late fee — at first. If your LLC receives a “Notice of Grounds for Administrative Dissolution,” you’ll have 60 days to file your annual report and pay the fee. Failure to file by the end of those 60 days will lead to the state dissolving your business.

For more information, check out our North Carolina LLC Annual Report guide.

LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure you handle your business taxes correctly.