- Unofficial totals showed 62% support and 38% opposition.
Voters in North Carolina approved a constitutional amendment lowering the state income-tax ceiling from 7% to 3.5%, according to unofficial results. The State Board of Elections had statewide certification scheduled for November 24, so the result was not yet certified.
The amendment covers individual and corporate income taxes. It takes effect upon certification, but applies to taxable years beginning on or after January 1, 2027.
Unofficial totals showed 62% in favor and 38% against. The Republican-controlled General Assembly put the measure on the ballot, asking voters whether the constitution should prevent the state income-tax rate from being raised above a set limit.
The ballot question read: “Constitutional amendment to keep the State income tax rate from being raised higher than three and one-half percent (3.5%).”
The lower ceiling applies to taxable years beginning in 2027
Certification and the start of the covered tax years are separate steps. The amendment becomes effective when election results are certified. Its tax-year provisions apply to years starting on or after January 1, 2027.
The constitutional change sets a maximum, not a new tax rate. It restricts future state lawmakers from raising either covered income-tax rate above the ceiling unless voters approve another constitutional amendment.
That means the measure does not automatically change the rates taxpayers owe. Existing rate schedules remain a separate matter.
The amendment does not itself cut the scheduled tax rates
State law already provides for personal and corporate rate reductions on different schedules. The constitutional amendment does not enact those reductions.
| Tax | Period | Rate or scheduled change |
|---|---|---|
| Constitutional income-tax ceiling | Current ceiling; applies to taxable years beginning on or after January 1, 2027 | 7% down to 3.5% |
| Personal income tax | Tax year 2026; scheduled for tax year 2027 | 3.99% down to 3.49% |
| Corporate income tax | Scheduled for tax year 2028 | 2% down to 1% |
For individual taxpayers, the rate reduction to 3.49% is scheduled for tax year 2027. Businesses face a separate corporate-rate schedule, with a reduction to 1% scheduled for tax year 2028.
The amendment itself does not produce an immediate tax cut. Instead, after it takes effect, it places a constitutional limit on future increases to the covered rates. The amendment was estimated to have no fiscal impact because the applicable taxes already have rates under the 3.5% cap.
Supporters cite economic growth; opponents warn of less budget flexibility
Supporters said the constitutional limit would shield taxpayers from future increases and encourage economic growth. Sen. Ralph Hise, R-Mitchell, also pointed to Tennessee, which borders the state and does not have a personal income tax. Supporters argued that a higher state income tax can make it harder to attract businesses and jobs.
Opponents said a permanent limit could leave future lawmakers with less room to respond to economic downturns or raise revenue for public education, infrastructure and other state services. House Democratic leader Robert Reives of Chatham County said, “You're still getting taxed. It's just not coming through personal income tax.”
The election result remains unofficial until the state completes certification. The State Board of Elections’ scheduled date for statewide certification is November 24.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
